BOUM! Mortgages rate are unexpectedly dropping! The most aggressive offer is at 1, 99% from Investors Group.
Here’s a translation of an article in Les Affaires, written by Daniel Germain, who talks about the war of montages rates.
Jim Flaherty must be turning over in his grave. The war of mortgages rates just grows intensity with an offer from Investors Group.
The financial institution, known for her mutual funds share is shaking the mortgages rate industry with an unseen offer in Canada: a loan of 3 years with a mortgage rate at 1,99%.
For more details, the business offers a 36 months loan, close, with a variable rate of 101 points under the prime rate. This rate is actually at 3%.Therefore, the mortgage rate is under the symbolic threshold of 2%, a first in the industry.
«It’s an unusual rate», says Denis Doucet, director of public relation at Multi-Prêt, the biggest mortgage broker in Quebec. Tuesday, the broker was able to offer a variable rate of 2,60% to his clients for a 3 years loan.
The 36 months mortgage is not the standard. The borrowers choose, most of the time, a 5 years mortgage (60 months).
«With a rate that low, we got to ask if there are other services provided like the obligation to transfer investments», says Denis Doucet
«There is not. Anybody with a good credit record can benefit from this rate without others services», replies Gaétan Veillette, representative of Investors
The financial planner explain that Investor is determined to carve out a place in the industry and this since 5 years «We have also developed our expertise in the industry», says the financial planner of Investors.
We remember that the previous federal minister of finances, Jim Flaherty, was implicated in the mortgages rates business to cool the overheated real estate market, especially in Toronto, Calgary and Vancouver. He push back the financial institutions a little more than one year ago. Therefore, one after the other, these institutions drop down their rates of 5 years to 2,99%. Since M.Flaherty quit Stephen Harper’s cabinet, in March, the hostility came back on the mortgage credit market.
Unlike the fixed rate mortgage (where the conditions don’t change during the time of the loan), the variable rate fluctuates depending of the key rate.