’s acquisition of a Schedule I bank may signal the return of the old glory days for brokers who yearn for more-competitive rates
The dust hasn’t yet settled on the deal that Home Trust hopes will win it its Schedule I bank license, but brokers are already hoping the move will result in a more competitive offering.
“Home Trust did just drop their variable rate a few days ago, and they have always been competitive on the fixed-rate side,” Iain Macfadyen of Dominion Lending Centres
A Better Way told MortgageBrokerNews.ca. “They’re a pretty robust lender and if they can
offer some more lines of credit they could become even more competitive.”
Indeed. Broker lenders routinely point to the upper hand banks enjoy because of their cross selling capabilities. For many bigger banks, that allows them to use mortgages as something of a loss leader knowing that they will then be able to sell those customers on myriad other services in the years to come – services providing much higher margins that mortgage lending
Macfadyen is interested in seeing what consumer credit options the lender plans on offering now that they are a licensed bank.
And players have already noted that the acquisition of CFF Bank will allow Home Trust to access more capital, which will help them beef up their product offering.
For his part, Lawrie Thom of Mortgage Architects
MestMortgageVancouver.com is waiting to see just how the lender plans on expanding.
“The availability of having more products in the channel is always welcome; the question is what changes will be made,” he said. “I think we need to expand our offering to stay competitive; Home Trust have always been a valuable option in the alternative space and I know they’ve made strides to become bigger in the A-space.”
Home Capital announced Monday that its subsidiary, Home Trust, will acquire CFF Bank – a Schedule I licensed bank. The purchase price is estimated at $15 million and would be aimed at acquiring all outstanding common shares in the bank.
If and when the deal is finalized, Home Trust will finally have its Schedule I bank.