Homeowners will be hearing more of the name ICICI Bank. The company is now distributing mortgages through mortgage planners, at budget rates. The move will undoubtedly give its volume a healthy boost.
ICICI Bank Canada began its broker pilot in February and had its full-scale launch on Monday. The company says its strategy is to offer “best-in-class mortgage rates to the broker channel” and an “aggressive compensation structure to provide incentive to brokers.”
For a full-featured mortgage, its rate sheet delivers. But as brokers know, new lenders often come to market with great rates to create buzz, and then fade off into the horizon. So we’ll be watching ICICI to see if its rates remains as competitive as it is today. If so, non-status brokers will have another “go-to” lender.
From a features standpoint, ICICI mortgages have good standard equipment, including: portability, assumability, 20%/20% pre-payment privileges each calendar year, and 120-day rate holds on purchases (90 days for switches/refinances).
For a limited time, ICICI is paying legal fees on both switches and refinances! (Usually, legals are only covered on switches; BC and Ontario only)
ICICI has 120-day pre-approvals on all of its terms (its quick close has a 30-day rate hold)
It allows pre-payments on any normal payment date. (Some lenders allow only one-lump-sum pre-payment a year–which is sooo annoying).
ICICI pledges a 24-hour turnaround time on underwriting. (Brokers will tell you that’s a promise ICICI will have to earn. Brokers have become totally jaded by service guarantees lately. As the recent application rush proved, many lender’s SLAs don’t mean a hill of beans.)
Other things to know:
At this point, ICICI is only offering high-ratio residential mortgages insured by CMHC. On a conventional mortgage, the client has to pay the CMHC premium. (Most lenders don’t charge a premium on LTVs <= 80%, and ICICI will probably eliminate this premium as well, once it adds a conventional mortgage lineup. There’s no timeline on that, however.)
ICICI’s variable-rate mortgage is convertible only after the first 6 months. (This is somewhat unusual but it’s not an issue if you plan to ride your variable out.)
If you’re a broker, expect ICICI to announce its volume bonus structure soon. Thankfully, we hear it will be based on firm-wide volume as opposed to individual broker volume.
ICICI also finances rentals, subject to CMHC guidelines
Once ICICI Bank has a wider presence in the broker channel, it says it, “intends to supplement its product offering to mortgage brokers with add-on products…such as home equity lines of credit.”
About ICICI Bank Canada
ICICI Bank Canada is a full-service direct bank with an asset base of about C$ 5.8 billion. ICICI Bank Canada is a wholly-owned subsidiary of ICICI Bank Limited, which has its headquarters in Mumbai, India. ICICI Bank Limited is India's largest private sector bank as measured by asset base, and the second largest bank in the country with consolidated total assets of about US $103 billion. All figures as of December 31, 2009.