Variable Rate offer at 1.99%

May 14, 2014 | Posted by: Patrick Mulhern

 

Variable Rate at 1.99%

 

I am sure you have all heard that Investors Group is offering a mortgage to their clients at

prime-1.01% (currently 1.99%).

 

Here are the terms of the offer:

      *   3 year variable rate term

  •       *    Cannot be assumed
  •       *    Not portable to another property
  •       *    Cannot refinance during the term
  •       *    Cannot convert to a fixed rate if rates start to increase
  •       *    Can only get out of the mortgage on a bona fide arm’s length sale

 This is an amazing rate but for a very limited type of client.   The main issue here is what options are available if rates start to increase in 1 year.  Client cannot convert to a fixed rate.  Client cannot even pay it out with a penalty to go to another lender.   Very restrictive however,   like the restrictive offer BMO introduced last year (5 year fixed at 2.99%) we will have to see what the competition comes up with.

 

Will let you know.

 

Enjoy the sunshine,

 

Pat

 

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