TagBMO

Posted May 17, 20182 Comments Bank News

And the Variable Rate price wars begin… Here’s how you can benefit!

In order to fully understand how to take advantage of record-low variable rates, it’s important to learn some mortgage history.

BMO came out swinging first a week ago with a variable rate of Prime minus 1.00%. Historically, when a BIG SIX BANK comes out with a huge price decrease, it’s only for a very short time – likely 2-3 weeks. But, during that time, they can gain massive volumes and satisfy their market share requirements from the average borrower.

With all the talk of interest rates going up, this is welcome news for borrowers. Last week, I wrote about Variable rates at Prime minus 1.09%. This week, the banks have caught on.

Continue reading “And the Variable Rate price wars begin… Here’s how you can benefit!”

Posted March 15, 2017 Bank News

BIG FIVE BANKS employees speak out about deplorable sales tactics… and it’s gone viral!

A news story from CBC has gone viral. The BANK employees are under tremendous pressure to sell YOU products. They will say and do almost anything, according to the CBC news article.

For those of us working in Financial Services, this is old news. Stories of high pressures sales and tied selling has been going on for over two decades. Sales targets were introduced to the retail branch network in the ’90s. It was the beginning of a new sales culture. Prior to this, bank tellers and account managers had always worked with a ‘soft sell’ approach. They were there to help and service your needs. This was about to change forever.

Your bank teller is now scanning your financial profile to see if they can up sell you some bank product. Last week, my son and I were in the TD Bank and they informed my son he was preapproved for a TD Visa card.. of course, there was a small annual fee… so we can add to the BANK’s $billion profits!

Now we are seeing Mobile Mortgage Reps working for Banks. They come to your home or business. They are paid on a commission basis. Think about it. How can anyone expect them to be unbiased? They can only sell you one brand and one range of products. Are all mortgage products the same? They can never truly provide neutral advice or recommend other brands.

It will be interesting to see if this issue gets swept under the rug or if it will become a big stink. The BIG FIVE BANKS rank in the top EIGHT largest corporations in Canada. And last year, RBC was the first Canadian corporation to report over $10billion in net profit.

Hmm, I wonder how they make all that money, year after year, after year, after year.

Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted January 4, 20161 Comment Bank News

BIG SIX BANKs report obscene RECORD $34billion in profits for 2015…and still complaining!

It’s that time of the year again.. The Banks have to report their annual profits.. And no surprise, the BIG SIX BANKS are at it again..

RBC reported a $10billion annual profit for 2015. This is the first time a Canadian company reported an annual $10billion profit. Yet, at the same time, they are crying the blues and warning of troubled times ahead. (uh, that’s the same speech they’ve made for the past 10 years.. here’s a 2013 headline). GIVE ME A BREAK!!! Canadians aren’t buying it anymore..

Check out the obscene profits pulled in by the rest of the BIG SIX BANKS..

Continue reading “BIG SIX BANKs report obscene RECORD $34billion in profits for 2015…and still complaining!”

Posted June 2, 20121 Comment Fun news

More dumb Bank ads.. but they won’t fool us.

Are you watching the Stanley Cup playoffs? Year of the underdogs… I’m a huge hockey fan and although my favorite teams are out of it, I’m still watching… and I’m still willing to put up with the commercials… but some of these ads are rubbing me the wrong way.

Like most TV ads, the truth can be exaggerated… Take the Old Spice commercial… “I will have big muscles and cool hair”…. have you seen that one? My son loves it… makes me laugh too….

But when we’re dealing with something more important, like your money and your mortgage, the truth shouldn’t be cryptic…. The ‘BIG SIX BANK’ ads, bother me… I’ll explain.

A few years ago, during the Olympics, RBC hit us with a commercial that showed a young couple searching for homes.. Their RBC mortgage rep recommended they split their mortgage “part variable and part fixed… to save money.” Remember that one? click here to view it. I strongly criticized this product and the so-called advice because it didn’t make sense to break up the mortgage…. Fast forward to today…. My criticism was well justified….Anyone that listened to my warnings would have saved money… Anyone that took this RBC product lost out… Clearly, that was NOT the right product to ‘save money’.

This year it’s BMO….We can’t seem to escape these ads. How does it go again? .. A young couple are shopping for a home, walk through the bedroom and into the closet, when they magically appear in the BMO BLUE ROOM with a BMO Banker…

They want to pay their mortgage faster… Have no fear, the BMO Banker is here to the rescue with their pearls of wisdom… The Banker says, “we can help…by restructuring your payments and getting you into a low-rate fixed mortgage, you’ll pay your mortgage off sooner“… Wow! That’s GREAT!! The young couple are excited… Cue the music!!

Now let’s decode this cryptic message… ‘restructuring your payment’…. What could the Banker possibly mean? No mystery folks… It means you must increase your payments. Yes, that’s all it means…There is only one way to pay your mortgage faster…. increase your payments or make at least one lump sum payment annually… click to here to read about the bi-weekly payment myth.

The Banker continues and says ‘…..getting you into a low-rate fixed mortgage, you’ll pay your mortgage off sooner’. This must be some magical product… it sounds great…! Uh, no.. guess again. Let me give you the straight goods…… BMO refers to their NO FRILLS mortgage as their ‘low-rate mortgage’. That’s quite misleading if you ask me. So once again I am issuing a STRONG WARNING. For the record, this is probably the worst mortgage product you could ever take, in my opinion. It’s just slick marketing…

You can’t pay the mortgage out for 5 years, without selling your home…..meaning you can only refinance with BMO but there is no obligation for BMO to give you the any future discount, let alone the best discount…..you have limited prepayment options…… and let’s not forget, the infamous BIG SIX Bank penalty calculation….we’ve seen how this one has cost borrowers $20k, $30k and even $40k in penalties!.. click here to read more about how BIG SIX Banks calculate penalties.

The Banks have deep pockets and spend hundreds of $$millions on ads… It’s up to the little guys, like me, to tell it like it is… Hey, I won’t promise you good looks and cool hair, but I can promise you to tell it like I see it… There are better mortgages available… Better terms, rates, privileges and options and ultimately, these better options will SAVE you money on your mortgage. That’s our goal… to pay the least amount of money to own our homes. Don’t get fooled by a flashy low rate… Rate is important but it isn’t everything. These aren’t opinions, these are facts. Just do some research or speak with an unbiased professional. Speak with a Mortgage Broker.

As always, let me know if I can help… and feel free to send this article to someone you think could benefit from it…

Steve Garganis

steve@mortgagenow.ca

416 224 0114

Posted March 8, 20124 Comments Interest rates

BMO NO FRILLS mortgage 2.99% is back… but please don’t read the fine print…

Ladies and Gentlemen, here’s a quote from Mr. Frank Techar, head of BMO’s domestic retail bank as published in The Financial Post “We believe these products will allow our customers to borrow smartly,” I couldn’t agree more… After you spend some time reading the product details, you are sure to turn around and run.

BMO’s NO FRILLS mortgage is back…2.99% for 5 yrs fixed and 3.99% for 10 yrs fixed until March 28. Both come with the same restrictions and limitations as before… We give this product a BIG THUMBS DOWNS! We recommend you stay away from this type of product.

Even thought I don’t like the product, I do like seeing these product announcements… they create a buzz and get competitors to react. It’s great for business.

First off, let me say, there are LOWER unadvertised rates out there…you can get another NO FRILLS 5 yr fixed at 2.95% and a REGULAR 10 yr fixed for 3.94%…..Now that I have your attention, I strongly recommend you read the details before making a decision…. mortgages can be complicated. Don’t make the wrong a decision.. speak with a Mortgage Broker.

What makes this product different from their regular line of mortgages are the restrictions and limitations. In January, BMO made headlines when they first announced this so-called ‘special offer’. It’s special alright… READ THE PRODUCT OVERVIEW… In January, I warned against taking this product…. my warning has been reactivated…. Once you read the fine print, you will realize this product is not suitable for most of us..it’s just a lot of smoke and mirrors trying to get you in the front BMO door.. a good marketing ploy… and I’m sure they’ll gain market share because of it. But let’s make sure you understand the fine print…

YOU STILL WANT THAT BMO NO FRILLS RATE?

But let’s say you’ve read all the fine print and still want this product… I’ve got news for you…. There are BETTER PRICED NO FRILLS PRODUCTS…. As a Mortgage Broker I have access to better unadvertised rates… Only problem is, I don’t have a $500million advertising budget… So I have to rely on providing my clients with good advice…Fortunately, my good advice has served me well and 95% of my business comes from repeat clients and referrals.

MY ADVICE

No Frills products came out around 8 years ago and my advice has been the same. DON’T TAKE these products. If you do, chances are you will not come back to me as a satisfied client. I can kiss your future business and future referrals good-bye. And I can’t afford to do that. That’s why you’ll NEVER see me promote or recommend these products. Yes, I have access to them but I’m going to do everything in my power to steer you clear of them.

WHAT’S AVAILABLE TODAY

Interest rate is probably the most important part of a mortgage but it’s not everything. Did you know that there are excellent 5 year fixed rate products hovering between 3.19% and 3.29%? and 10 yr fixed rates of around 3.94%? Why are these better? You don’t have to give up your options. You don’t have the restrictions of a NO FRILLS product, like BMO’s ‘low-rate mortgage’. You have full prepayment privileges.. you can payout the mortgage without having to sell your home.. you can refinance with any lender and not just your original lender… meaning you will be able to negotiate a competitive rate should you need to refinance. On average, Canadians refinance their mortgage every 3 years… This happens for a number of reasons.. selling their home, debt restructuring, family issues, work issues, etc…. Mortgage penalties charged on these NO FRILLS mortgages can be outrageous… we’ve seen penalties of up to 14, 16 and even 20 months worth of interest… Don’t put yourself in that situation…

Get all the facts and then make a decision.