BMO’s 2.99 5-year-fixed rate announcement has got people talking and Googling, helping kick start the spring housing market for its competitors; namely, brokers.
“It will certainly get the spring market moving,” says mortgage professional Ray McMillan of Home Mortgage Consultants. “You will see a lot of lenders try to match that; I expect Scotia
will drop theirs too.”
Google Canada has seen more than a 50 per cent jump in searches for ‘mortgage’ since the Monday announcement, with searches for “MLS” and “insurance” also increasing in popularity over the past day.
“The spikes in searches may suggest that consumers who previously felt shut out of the housing market are being influenced by these low rates and have turned to online sources to learn more,” observes Google Canada’s David Resnick.
It may also mean that fence-sitting clients will now make their long-awaited move into the market, say brokers, anticipating reaction to the BMO move.
While Canadians tend to search for houses on the weekend, searches for “MLS” were up 8 per cent compared to the previous Monday, suggesting that mortgage news
impacts Canadians’ search habits.
Searches for ‘insurance’ spiked by more than 110 per cent in the 24 hours following the lower rate announcement, which may suggest that Canadians are researching mortgage or home insurance more often.
As if to confirm the raised interest, it was during the interview with MortgageBrokerNews.ca that McMillan received a tweet from XCEED Mortgage, announcing that it, too, was lowering its advertised rate to 2.99.
“You will see more competition like this,” observes McMillan. “It’s a great promotion for the industry.”
It was January of last year that BMO dropped its 5-year fixed to 2.99, spurring an industry-wide response from the major lenders with 4-year fixed rates. It is anticipated that the other major lenders will match the 5-year fixed offer this year.