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Wednesday, April 24th, 2024

Spring Mortgage Wars for Vancouver Home Mortgages? – Consult with a Vancouver Mortgage Broker

Spring Mortgage Wars for Vancouver Home Mortgages?

Adil Virani Vancouver Mortgage BrokerThat’s the big question that many people in the mortgage business are asking themselves these days. There is no doubt that mortgage lending has slowed somewhat because of the recent rule changes made by the Feds in the mortgage industry.

So, what’s in store for Vancouver home mortgages for this spring?

Well, even the big banks have felt a bit of the pinch on their profit margins, and it seems they are not taking this change lying down. The Bank of Montreal was the first to come out swinging to thwart this reversal by lowering its 5 year fixed mortgage rate down to 2.99%.

Many people in the mortgage business are wondering whether the banks are gearing towards a bit of a mortgage war as they get ready for the very busy spring home buying season.

Although none of the other big banks have matched the BMO’s new rate, many of them are already advertising a very similar rate but for a 4 year fixed mortgage such as can be found being offered currently by the TD and CIBC.

Some mortgage lenders liken this current pitch by BMO to what occurred almost a year ago when the banks were feuding over a 2.9% rate. Some experts also point out that although the banks did attract a bit more business they felt more pain than gain when it came to their NIMs (Net Interest Margins). The NIM is the variance between what a bank pays out on their deposits versus what it receives back from loan collections.

BMO was one of the big institutions that suffered a decline in its NIMS when it went this route before. Some of the expert analysts see a similarity to what occurred last year.

These same analysts also say that this mortgage price war has been gearing up over the past several weeks, long before the BMO made their announcement. They also say that it might be more of a sales gimmick than anything else simply to kick start the spring season. They also don’t believe that BMO’s announcement will have a very dramatic impact on the market.

Some advisers also point that BMO’s rate sale has its limitations and its main purpose is to help increase the overall lending volume as reduced lending could have a somewhat negative affect on their overall earnings.

The biggest drawback to what BMO is offering is that there are restrictions involved especially when it comes to transferring the mortgage to another lender.

Borrowers need to be cautious about thee restrictions before they jump on the band wagon. Other lenders say they aren’t overly concerned and will stay the course simply by offering rates which are competitive but offer mortgages which also have more flexible options built into the terms.

Cheap rates might look great as  a headline, but when it comes to shopping around for Vancouver home mortgages, you always want to take a good hard look at the small print before you sign on the dotted line.



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