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.

Sort by:   newest | oldest | most voted
southseacompany
Member
southseacompany

“TD forecasts Calgary’s ‘oil-driven’ housing sales will plunge nearly 50% this year”, Calgary Herald

http://calgaryherald.com/business/real-estate/calgary-mls-sales-forecast-to-plunge-nearly-50-this-year?__lsa=e7fe-5187

“The report said prices “appear to be on track” to drop by as much as 10 per cent over the next four to six quarters from their peak levels late last year.”

Son of Ponzi
Guest
Son of Ponzi

Re: Pork lunches.
If they come to Richmond, they will be served HAM lunches.

Son of Ponzi
Guest
Son of Ponzi

The Great Exodus of the Caucasians from Richmond has begun.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@3

Begun? I thought it was in the final stages.

Oracle
Guest
Oracle

Vancouver 2025:

Asia: Richmond, Burnaby, Vancouver West/East, Westwood Plateau, Ladner

Europe: New West, West Van, North Van, Langley, Coquitlam, SouthSurrey, Point Roberts

S. Asia: North Surrey, North Delta, west Abbotsford

I think its would be best served by the American to open up its borders for born here Canadians. The lower mainland is changing too fast.

Son of Ponzi
Guest
Son of Ponzi

#4
You ain’t seen nothing yet.
This will equal the Exodus of the Juice from Egypt.
Remember, locusts were metioned in the Bible, too.

patriotz
Member

Oil rout continues to hit Western Canada’s housing markets

Prices were down 1.4 per cent in Calgary, compared to last year

There you have it, Calgary now down year over year.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@5

chinatown is becoming white.

@patriotz
Guest
@patriotz

Thanks Patriots,

Another 2 years of this types of declines and I can buy. Just hope oil stays down for 2 more years. Then I get 2-3% off! Yippee !!

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

calgary is down year over year? did cmhc stop insuring mortgages in alberta? are interest rates higher there than the rest of the country? did the alberta property bubble collapse under it’s own weight?

don’t forget, it’s a NATIONAL bubble. not based on fundamentals, but on cheap money provided by the CONservatives. right guys?

Zero Down Forty
Guest
Zero Down Forty

@#10

If I blow two balloons up simultaneously the probability of them popping at the same time would be low.

And logically, their popping time would have nothing to do with determining the source of their inflation.

patriotz
Member
Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@Zero Down Forty

what is your point?

are you saying (1) the price declines in calgary are NOT related to the price of oil, or (2) ALL canadian real estate is overpriced because of oil and calgary is just the first to see the decline?

patriotz
Member

@13: ” calgary is just the first to see the decline? ”

Calgary is not the first to see the decline at all – to the contrary until recently it was one of only three metros (with Vancouver and Toronto) not to see flat markets or declines recently.

RE prices in the US did not fall in unison. Everyone recognizes that they were all overpriced due to easy money, but local factors played a role in when each one peaked and how fast they fell. Except you perhaps.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

patriotz, is this the beginning of the long awaited collapse in real estate? that’s what you seem to be suggesting. why not stick your neck out and actually say it if that’s what you think.

will VHB once swoop in and make an appearance?

how long until we see price declines in vancouver? any idea?

patriotz
Member

@15:

I’d rather focus on the known present than the unknown future. The present fact is that buying in Vancouver is much more expensive than renting. Those buying today are betting on continually increasing prices and continued low interest rates to come ahead of those deciding not to buy.

So why not ask a recent buyer why they are predicting a future in which the economy will go their way for decades?

VanRant
Member
VanRant

Could this be the year of the Canadian Great Housing Crash?
– Houses are dropping in most cites in Canada
– Jobs and companies are disappearing
– Interest rates are finally going up in US this summer
– People are maxed out on credit
– China is starting to run into problems
– North Van and Van West are slowing

space889
Guest
space889

@patriotz – with the exception of Japan, in general economy and wages have increased over decades…I meant is there anyone working full time still making $10K/yr like in the 70s?

Yeah, you can argue about inflations and increased taxes, etc but debt amount is nominal, not real. Also we don’t throw people in jail or chop off their hands here when they can’t repay the debt and declare bankruptcy.

So yes, I would say for most people on average, things will be beter and “go their way” in the next few decades. Very few people today will say their overall life is worse than 20 years ago and I doubt many people 20 years from now will say their life is worse then compared to now.

Zero Down Forty
Guest
Zero Down Forty

@#13 I’m saying that the asset inflation we’ve seen in the last 15 years was the result of easy money combined with the speculative activity caused by the expectation of gains.

The latter seems to have weakened in Calgary lately.

Mortgageslave
Member
Mortgageslave
@Space889 – WRONG! Inflation in EVERYTHING has outgrown wages. That is REAL. “Also we don’t throw people in jail or chop off their hands here when they can’t repay the debt and declare bankruptcy.” What about mortgages? If you want I’ll translate to french: Mort – death Gage – pledge Deathplege – yes, they don’t cut off your hands but you cannot walk away or claim bankruptcy from a mortgage. That is what the Bullish arguement doesn’t understand about Investing in risky assets. It doesn’t matter if you make $$ here or there, once the market turns it’s game over, you’ve set your future. Locked in to the mortgage. Good luck with that. BBB is a clueless as well. He sounds like a 12 year old on the playground, nananana. Grow up and post some substance. I’m getting tired of… Read more »
nufio
Guest
nufio

rates are not going up in the US this year or anytime in the near future is what I think.

nufio
Guest
nufio

i doubt rentals in whistler are based on average income there. I am not a bull on van RE, but rent:income in vancouver is also way out of whack that other cities in the world.

Mortgageslave
Member
Mortgageslave

Nufio, after this season you can name your price to rent in Whistler!

Yunak
Guest
Yunak

@17

Could this be the year of the Canadian Great Housing Crash?

– China is starting to run into problems

Steady feed of Chinese can keep Canada’s or at least Vancouver’s RE in tact for generations. There is just too many of them that supply can last forever, so some shakeups won’t change it. Second/spear home in western country became as a car or child to them, it’s a must. It is too late to change that, it became part of identity, culture and existence.

Westside Realtor
Guest
Westside Realtor

HAM absent this year.

I suppose the slow motion train wreck that is the Chinese real estate market is weighing on things.

SFH market at the upper end is blah, to say the least.

Great Unwashed still outbidding eachother over crap east van bungs….they will get the memo once they are all in.

WSR

wpDiscuz