Upstart Mortgage Company Offering 1.99 Percent Variable Mortgage
VANCOUVER – Competition for your mortgage business just got hotter as summer sales season gets into high gear.
In the wake of banks offering five-year mortgages for less than three per cent, Investors Group has a different type of mortgage for less than two per cent.
Investors Group will sign you up for a mortgage at what’s believed to be a record-low 1.99% on a three-year, variable rate term. That’s just over a full percentage point (1.01%) below the prime rate, which surprises mortgage broker Peter Kinch, reported News 1130.
“We thought that banks were getting aggressive at 50 or 60 basis points off prime, and quite frankly, the market was very happy with that. So, it’s quite shocking that somebody would go a full one point below prime,” says Kinch.
He describes the move as a “very aggressive way to capture market share.” The Investors Group rate on a typical five-year fixed-rate mortgage, however, is slightly higher than the big banks’ offerings.
The company is now offering 101 basis points or 1.01 percentage points off its prime rate of 3% for a variable rate mortgage. Consumers can get the deal for a 36-month term which is shorter than the length offered by some of the major banks on the deep discounted five-year fixed rate mortgage which has dropped to around 3% — a controversial level that once drew the wrath of the department of finance.
Peter Veselinovich, vice-president of banking and mortgages with Investors, said his financial institution was able to set aside a block of funding to be able to offer the cut rate deal.
There are some conditions to the mortgage, namely you cannot break it without selling your home. Nevertheless, the loan does allow consumers to double up monthly payments and pay a lump sum of 15% of the mortgage every year.
