Just when you thought rates couldn’t drop any lower, intelliMortgage is advertising a 1.99 per cent 5-year
fixed mortgage – currently the lowest in the marketplace for a 5-year fixed product.
“1.99% is a 5-year fixed rate that some said we'd never see. As recently as fall 2015, one industry economist was proclaiming that
mortgage rates had bottomed,” said Robert McLister, president of intelliMortgage.
He also mentioned the psychological impact of the rate, saying that the rate beginning with a ‘1’ has a powerful impact on borrowers. Apart from that, the rate provides an opportunity to gain exposure for their self-directed mortgage model, as well as garner business through the end of the summer.
“August is a notoriously slow month as folks go on vacation and/or settle into their new homes before the back-to-school season. That had us looking for a way to make the phones ring more,” said McLister.
In order to secure this rate, the mortgage must be insured by CMHC, which means that it would be suitable for home buyers with less than a 20 per cent down payment. You should also have “excellent” credit and provable income in order to ensure that you’ll qualify for this extremely low rate.
You shouldn’t get this mortgage if you think you’ll need to refinance before the term is over, although according to intelliMortgage, there is a “fair” penalty if you decide that you have to break your mortgage to sell your property or refinance. The product has some perks, such as 20 per cent pre-payment privileges, optional annual 20 per cent pay increases, free appraisal and home warranty. There are, however, some caveats, including being unable to get a preapproval (but there is a 120-day rate hold), a closing within 120 days, and the property must be owner-occupied.
The rate is a limited-time offer, only good until August 29th
, although there may be another window of opportunity for home buyers if there’s a good response to the promotion and/or if the rate environment stays the same.
“It could go on a little bit longer, it depends on how the reaction is,” McLister said. “The reaction’s been tremendous.”
This record rate low comes as industry insiders and people looking to get a mortgage are wondering how much longer it’ll be before interest rates start to rise. From the looks of it, it won’t be anytime soon.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
More market watch: