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IG’s 1.99%. Some Odds of Note

Investors-GroupInvestors Group’s 1.99% variable-rate special is already making life harder for competitors. Clients are contacting their bankers and brokers and asking, “Is this mortgage right for me?” and “Can you match this rate?”

Mortgage advisers are actively, and in many cases rightfully, selling against this mortgage. The fine print speaks for itself, albeit it’s still a spectacular deal.

We asked ourselves (and answered ourselves) the following questions.

What is the probability that:

  • Financial Minister Joe Oliver puts the kibosh on this rate? <5%
  • Investors Group took a page out of BMO’s rate marketing playbook? 99%
  • a major bank will publicly match prime – 1.01% this year on a variable rate? <5%
  • this promotion will cause abnormally high cancellation rates (at other lenders)? >95%
  • you’ll be cross-sold other products if you get this mortgage? >95%
  • you’ll care about IG cross-selling you if you get this mortgage? <50%
  • you won’t get the best rate in the market if you lock in this variable rate? >90%
  • you’ll curse IG’s name if you take this rate and want to refinance or port/increase before maturity? >95%
  • you can switch to another lender at maturity without legal costs? <25%
  • Investors Group depletes its funding for this promo, faster than expected? >80%