Opinion among brokers was divided about Investors Group’s recent rate promotion and just how good a deal it was for customers. We wanted cold, hard numbers, though, so we asked our readers how many were able to convert client inquiries into funded deals. Read on for the results.
Investors Group made headlines in early May with its 36 month closed variable-rate mortgage rate at 1.99 per cent (Prime minus 1.01 per cent).
56 per cent of our readers polled said they were able to convert customer inquiries about the product into deals of their own, which shouldn’t come as a surprise following a number of industry player comments about the limitations of the deal.
“Please note: not so ‘minor’ stipulations: fully closed, arm’s length sale. No transfer, no port, no nothing,” Ron Butler of Verico Butler Mortgage said in the comments section of MortgageBrokerNews.ca. “Need to refinance in year three, job transfer in year two, need to do anything with the mortgage? No matter what your equity is in the house always the same answer: sell your house.”
And for the most part, clients listened when brokers explained the details of the promotional rate.
“I’ve had seven people email or call me about the offering and asking if I can get it,” Jake Abramowicz of Mortgage Edge told MortgageBrokerNews.ca in mid-May. “When I showed my one client the limitations it was enough to scare him away, though.”
Still, some customers were swayed, with 43 per cent of readers polled said they were not able to compete with the rate.
Investors Group has since shelved the promotional product but it has led brokers to call for monolines to pull together a similar offering.
“If a monoline did this they would be very smart; they would gain a massive market share,” Abramowicz said. “I spoke to a few (when the rate was announced) – MCAP, RMG, CMLS – and they were as surprised as the rest of the industry.”