An Example of Flaherty Doing More Harm than Good when it Comes to Mortgage Rates
It being the last day for BMO’s five-year discounted mortgage rate, we thought it would be an appropriate time to have the last word on Flaherty’s controversial stirring of the pot when it comes to mortgage rates in Canada. This time to say that, when critics said that Flaherty was only drawing more attention to the very rates he wanted banks to stop offering, they were right. And in fact, one brokerage is even using Flaherty’s most recent rant as part of their own marketing campaign.
The ad may be more controversial than what Flaherty initially said, if you’re looking at things through the eyes of the federal government. It shows a picture of Flaherty, of course looking as menacing as possible. Splashed across the front is the actual advertisement – mortgages to be found at 2.79 per cent for a five-year fixed rate mortgage. And just below’s Flaherty’s sneering picture, another caption that reads, “This rate is too low for the Canadian people.”
So, was the point really just to advertise a great rate, while maybe poking a little bit of fun at the Finance Minister at the same time?
“We were distributing the flyer at the Home Show to promote our special rate,” said Sean Binkley, a broker from that brokerage. “We are having a pretty good chuckle about it at the office and it received lots of laughs from the Home Show, great conversations. I normally don’t sell rate, but I was piggybacking for a short period based on Flaherty’s comments.”
But all fun aside, Binkley’s very serious about making sure that they’re not doing a disservice to customers by enticing them with super low rates that in the end, they still won’t be able to afford.
“We counsel our clients to pay more right away – that is pay ‘as if’ you had taken a 10-year rate, we show them how much more they can save, advise them about the rate increasing in 5 years, etc.,” says Binkley. “There are lots of clients I will ask to reconsider buying if they are close to qualifying; to me, qualification does NOT mean affordability.”