Tiny lenders chop rates to grab mortgage customers

Rates have dropped and that means better deals on mortgages. The big banks have dropped discount rates to an average of 2.79% on a 5 year mortgage.

Meanwhile the smaller lenders are hungry for more business so they’re cutting profits to compete on lower rates.

Mortgage Brokers are also taking cuts on commission to compete in the race to the lowest rate:

The rate war is even more intense among mortgage brokers, many of whom are shifting away from the traditional full-service model that saw brokers spending hours working with clients to select the best mortgage and earning hefty commissions. These days, more borrowers are turning to online and “self-service” brokerages that compete on volume, offering less personalized service and sacrificing some of the commissions they earn from lenders in order to discount rates even further.

Not everyone is a fan of the model. Some are worried that with interest rates already so low, brokers are having to dig deep into their commissions to offer meaningful discounts, a model that some brokers argue could threaten the industry as a whole.

“The majority of people don’t like what we’re doing and it’s a troublesome thing for us to digest because ultimately it’s the best for the consumer,” said Jeff Mark, co-founder of Spin Mortgage, an 18-month-old online brokerage that is advertising a five-year fixed rate at 2.49 per cent, well below the typical bank rate, by sacrificing some of its commissions. “We make less money per deal. I don’t know how that isn’t a good thing for the market.”

Read the full article here.

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Shlomo
Guest
Shlomo

Yeah, I had a dream about roving gangs of vigilantes buying those fully-cooked chickens from Safeway or Save-on, and driving through town, lobbing a couple of those over the fence into each empty house’s yard, to encourage rat infestation and pestilence.

Nothing will ever beat the Great Vancouver Plague of 2016 as a Black Swan event!

Royce McCutcheon
Member
Royce McCutcheon

As near as I can tell, these are truths for rent in Vancouver:

1) They have generally failed to grow at a rate above inflation for decades (similar to incomes). So if they’re unaffordable, they’ve been unaffordable for quite a while. I believe the CUER data at UBC support this, though other data may also be available.

2) They are SUBSTANTIALLY lower than rents in cities that have comparable real estate prices to Vancouver. Easy enough to get a feel for this for NYC, SF, etc.

From personal experience, in a household with two higher professional incomes, I have previously been able to affordably rent a detached West side house on a 50′ wide lot, with an assessed value way beyond what I could responsibly afford.

YMMV.

StupidityCheck
Guest
StupidityCheck

70: Are you serious? spaceman’s posts are voted down because he’s a super-sensitive troll that never contributes anything useful to the discussion.

nufio
Guest
nufio

I have to agree with space on this. vancouver rent:median income is way out of whack as compared to other cities like seattle. Just because its cheaper than buying doesnt make it comparable to other cities. 2 br apartments near metrotown rent for 1500$ and above. A downtown decent 2br (not the new ones) rent for 2200+ now (I am talking 15 yr old apartments).

Its funny how hong kong wants independence when they really get most of their water from china. Also most of their economy exists only serving as a middleman to businesses in the mainland.

eventhough i dont share space’s views on bullish van RE i dont understand why all of his comments are downvoted.

space889
Guest
space889

Hongers like to think they are the jewel of Asian and superior to everyone else, but really they aren’t.

If you worship Hongers that much maybe you should go live there. Frankly, the only thing they are polite to is $$$$, everyone and everything else can just go f themselves as far as they are concerned. They are racists to non-whites and they are proud of it. But I guess maybe that’s why you love them so much.

space889
Guest
space889

@patriotz – $1K for a tiny 1br/2br basement suite along Main street is not expensive relative to income? Geez…

Anything decent for a family of 3 or 4 in Vancouver around Main St will cost you at least $2K and about half of the after tax income of an average family. I wouldn’t call that cheap or affordable. Renting here is not cheap at all, unless you are a VCI bear who can somehow score great rentals at 30%+ below market price.

space889
Guest
space889

@vangrl – So you are blaming the victim here?? Really??

I thought for a woman you would be smarter than that….especially after all the protests and slut walks.

Slagathor
Guest
Slagathor

….Another typical idiot who posts here but has no idea what is actually going on. ..

Those that live in glass houses….

In typical Whistler fashion, you won’t hear how bad things really are until the summer when there there’s no chance bad news will scare away potential skiers.

Chinaone
Guest
Chinaone

Patriotz. Thank you for being on our side. Many more of my cousin come here soon.

Chinaone
Guest
Chinaone

We like Mandarin only signs in Richmond. We have majority.

We have our signs inVancouver too one day. We make bylaw with majority.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
southseacompany
Member
southseacompany

“Greater Vancouver home sales prices slip as number of sales increase: CREA”, Business in Vancouver

http://www.biv.com/article/2015/2/greater-vancouver-home-sales-prices-slip-number-sa/

“Despite a 5.7% increase in home unit sales, the average selling price fell across Greater Vancouver”

“In spite of growing sales in the region, however, the average residential sales price dipped in the month. The average home sold for $825,233 in January – down 2.6% compared with $847,661 in December.”

@56
Guest
@56

“That is simply wrong. Though if you have a better source than the Wall Street Journal, to collaborate what you say, I’d like to see it.”

No it is not. You believe too much reatlor BS. Here is a recent study just done by Credit Suisse and posted b the BBC on the top 1% in the world. You only need $798K USD in wealth to be in the top 1%. It is calculated as assets minus debt. The US has over 5 times as many as in this club as China and Canada combined. China and Canada are the same at 1.6 million people.

18m people in the US
1.6m Canada
1.6m in China

http://www.bbc.com/news/magazine-30949796

vangrl
Member
vangrl

“You are celebrating property crime because the target is a demagraphic that you don’t like? grow up little girl
Oh that’s right, you are renting for life because your portfolio yield is incredible”

I’m renting right now, and I may be a renter for life, but it’s certainly not because I can’t afford to buy a house here, I’m just not stupid enough to spend 1.5 mill on a shitty house in a so-so area of Vancouver.

And ya, anyone that is stupid enough to leave “large amounts of cash” in a house that they don’t even live in, doesn’t deserve a lot of sympathy.
Abandoned houses always get ransacked, I’m surprised it’s only just starting to happen here. I have no doubt that news article gave more thieves the idea though.

RFM
Guest
RFM

A strong Canadian dollar has wounded the country’s auto manufacturing sector over the last decade, but the currency’s recent drop to a near six-year low is unlikely to spur a rush of new investment, senior industry executives say.

Canada has struggled in recent years to win new investment from automakers, losing out to both the United States and lower-cost Mexico. While some major automakers have announced new investments in Canada in recent months, they are expected to preserve jobs rather than significantly increase employment.

Source: http://www.autonews.com/article/20150217/GLOBAL/150219843/weaker-loonie-no-savior-for-canadas-ailing-auto-industry

patriotz
Member

@51: “The other present fact is that renting in Vancouver is very expensive.”

No it isn’t. Relative to income it’s somewhat above the Canadian big city norm, but this has always been true. There are plenty of posts on this forum telling you how much rent they are paying, and how the market prices of the same properties are massively out of proportion to rents.

To imply that prices in Vancouver are in some way justified by rents is complete BS. Even the RE industry seldom attempts this, but uses speculative arguments for buying like “building equity” or “climbing the RE ladder”, or of course “you will be able to sell to a rich Asian”.

patriotz
Member

@56:

There are now more millionaires in China than in Japan, as the wealthiest Chinese reaped huge returns from shadow-banking-related financial products, a new study revealed.

Ah yes, the Chinese version of the dot-com millionare.

crikey
Guest
crikey

#31 said:
” There are less millionaires in China than in Canada”

That is simply wrong. Though if you have a better source than the Wall Street Journal, to collaborate what you say, I’d like to see it.

Really though, China has something like 40 people for every 1 person in Canada. Of course they’re going to have a huge number of millionaires, especially given the economic growth there.

http://blogs.wsj.com/chinarealtime/2014/06/10/china-now-has-more-millionaires-than-any-country-but-the-u-s/

@vangrl
Guest
@vangrl

You are celebrating property crime because the target is a demagraphic that you don’t like? grow up little girl

Oh that’s right, you are renting for life because your portfolio yield is incredible

would-be buyer
Guest
would-be buyer
Pretty much the VA market is a race to $1M SFH average. The sheeples are busy bidding over asking on sub-$1M houses while $1M+ houses go unloved. The SFH inventory on the west side is INSANE. If rates decline further in the spring (highly likely), I suspect anything under $1M will go in a bidding war. Have you looked at houses lately? Houses sub-$1M are tragic, while houses even $50K over $1M are houses you would actually live in – but they require at least $200K investment. VA better pray that there are actually that many buyers with at least $200K to buy a $1M+ SFH. This market is fucking insane. I have basically become a day trader investing in stocks, because I cannot justify owning property in VA. I have tried justifying investing over $200K in RE in VA,… Read more »
history
Guest
history

http://www.cnbc.com/id/102429356

China new house prices drop at record pace.

history
Guest
history

a little stardust for you this evening…

“it is true the Gemini prefers to deal with the known whereas his opposite, the Sagittarius is more comfortable searching for the unknown.”

ostritch
Member
ostritch
A couple of things I disagree with today. A. Interest rates aren’t going anywhere. US interest rates will go up this year. Maybe late this year because the Fed has achieved it’s dual mandate of price stability and full employment. However, I’m betting that the rate hikes will be small and slow hampered by what’s happening globally with the big headline bugaboo called “global deflation”. Global deflation reminds me of last year’s US jobs and consumer spending reports when everyone (the media and therefore the blogs) freaked out that the US recovery was grinding to a halt when all it really was was a series of bad winter storms. If global deflation is being related to low oil prices signalling the end of the world, it won’t be in the headlines for much longer. The American (and Canadian) consumer have… Read more »
Real History
Guest
Real History

Re#$45

You will probably already notice this from experience, Canada* brings in super low interest rates and CHMC mortgage subsidies to drive up RE and put you out of your suburban Van neighbourhood, as a means to Drive Down fertility rates. Sorry no house for you to fuk and raise a family.
* secret org. at the UN actually tasked with demographic transition. They are busy in lots of places esp. the ME and Ukie.

Son of Ponzi
Guest
Son of Ponzi

Thieves targeting empty HAM monster homes in Richmond Is normal.
But rats moving in and gnawing the place up, that’s not kosher.