ATB Slashes Its 5-Year Fixed Rate

Falling-Mortgage-RatesATB Financial, Alberta’s largest financial institution, is featuring its 5-year fixed rate at an all-time low of 3.09%.

It comes with a 90-day rate hold whereas most rates of this calibre require a 30-day closing.

“We have no idea how long it might last,” says ATB VP of Direct Sales, Peter Bolton.

This promotion is currently available through “preferred brokers,” says Bolton, and also through ATB’s retail arm.

Hopefully ATB’s move is some indication of how far deeply discounted 5-year rates could fall at other major lenders. Lending spreads certainly support it. We’ll remain skeptical on that, however, until we see some actual rate movement by the banks.

We’ve been hearing reports from bank reps that advertised 5-year fixed rates could “soon” drop at least 30+ basis points at the Big 6. But people are getting tired of hearing the word “soon.” (See: Banks Delay Fixed Rate…)

For the moment, banks will keep milking interest spreads for all they’re worth, hoping that bond yields rebound higher so they don’t have to cut rates as much (which is always possible).

On a side note, it’s been the “5-year fixed and variable show” so far in the market. Few lenders seem to be offering anything compelling in the 1- to 4-year fixed space. Opportunity abounds for lenders to sell 2- to 3-year fixed product in the mid-2% range.

One halfway decent deal is CIBC’s 3% cashback switch mortgage. It is available through select brokers for $400,000+ mortgages, and has an effective rate in the 2.77% range (IF you use the cash back to prepay the mortgage immediately). But, it also has a few big downsides, not the least of which is its 100% clawback of the cash upon early termination.

Rob McLister, CMT

  1. what?!! thanx a ton for that update….
    its an omg…3.09…
    uh really dumb question for those of us without an economics degree but can toronto residents get a fixed mortgage from alberta lenders?

  2. and how ‘soon’ is soon with canadian banks…uh, next march? i guess u could say typical canadian cautionsness….

  3. i keep forgetting this is canada and we dont do anything extraordinary in canada …too bad but alberta could find lots of customers out east…

  4. let me guess here……
    there must be some archaic canadian rule that says a company in alberta cant lend money to a person in ontario for a mortgage because it would offset something or other…i am sure someone can enlighten me here….

  5. Unfortunately ATB Financial is considered a Crown Agent of of Alberta.
    ATB has a specific mandate to only service Alberta residents.

  6. too bad….but thanx for that update…i guess you could call that discrimination….in some quarters that would be frowned upon but not in the business world eh?

  7. NP,
    In this case it’s nothing to do with discrimination. ATB is regulated under the authority of the Alberta Treasury Branches Act and its business is therefore limited to Alberta.
    This isn’t unusual. Hundreds of Canadian credit unions also cannot lend across provincial lines (and generally they don’t lend out of their own local areas).

  8. if a person has a good credit rating and hes a canadian, uh, what difference does it make what province he lives in? again, just another archaic canadian rule i suppose

  9. no a canadian first…….i just want the best deal and who cares what province its in….perhaps that is an un-canadian request…

  10. once again, this sounds like discrimination….against someone from ontario..please some business person give me the reason why i am ineligible….

  11. Seriously buddy. Give it a rest already. I don’t think anyone is interested in hearing you anymore. Two people have already explained why ATB can’t lend in Ontario. Deal with it!

  12. Yes this is pathetic. There is no discrimination here bud. Too bad and move on and wait for Ontario banks to come down. If your whining about a difference of 3.89 to 3.0, think about the people that have been stuck in 5.0+ fixed rates for the while.
    Or maybe here is an idea…..MOVE to Alberta to get that incredible 3.09 rate!

  13. ATB generally doesn’t have the market leading mortgage rate for very long. This is a promotional rate that could change very quick. The last time there was a promotional rate, most lenders knew it was short term and didn’t bother to try and match the rate

  14. We are moving to Alberta in September from BC. Buying a house in Alberta to move in in the end of August. Were denied by ATB for this rate as we are not residents of Alta CURRENTLY.

  15. they are showing less than 3.15%…
    [Edited: Hi Dave, Feel free to post any URLs to regular lenders but we discourage posting links to broker rate pages. Otherwise, the site would be overrun with SPAM. Thanks for understanding. Elizabeth, CMT]

  16. I’d heard that ATB sent an email out to their brokers indicating that they are heading into a banking system conversion in a couple of weeks and therefore deals must be approved within two weeks. After that time they won’t be doing any business for at least a couple of weeks. Any insight into this Rob?

  17. Yes apparently it’s undergoing a banking system conversion. From what I understand in the broker channel:
    * There is a app backlog so processing times may be somewhat longer than expected
    * New pre-approvals are not being accepted for the time being
    * They aren’t accepting new deals that must fund between Aug 22 and Sept 9, 2011.
    If you’re a customer who’s interested, it’s best to confirm the above with an ATB-approved broker.

  18. It’s called the “Alberta Advantage” – discrimination? LOL – try getting a fishing licence in Ontario if you’re not a resident – you pay much more.

  19. It seems like a bit of a guessing game. My mortgage renews in early February. I’m currently with Scotiabank and they’ve offered me a 5-year FVM at 3.79% or 5-year VRM at prime – 0.8%. I’m not sure whether to take the variable rate and then lock in if prices drop (at posted minus 1%) or wait until November and hope that another lender will have better fixed rates at that time. This is my first renewal and it’s stressing me out! Any advice would be appreciated!

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