More Banks Enter the Variable-rate Fray

“Rate war” is a cliché in this business. But that’s exactly what we’ve now got in the variable-rate mortgage market.

BMO started it all with its record-setting prime – 1.00% offer. TD then promptly matched.

Now we’re hearing from Scotiabank branch sources that it’s offering prime – 1.00% as well — but only for new client applications and not for refinances (that sucks).

The Big News 

HSBC isn’t content to match. It’s counter-attacking with an walloping prime – 1.06% special, effective tomorrow.

That’s the biggest widely advertised variable-rate discount ever from a large bank.

But there’s more. HSBC is also:

  • giving away $1,000 cashback on eligible 5-year fixed and variable mortgages
    • Not available on refis, or to existing HSBC customers
    • Here are the full terms
  • promoting a “killer” (HSBC’s words) rate of Prime (3.45%) + 0% on HELOCs
    • That’s Canada’s best HELOC rate
    • Borrowers must apply by July 31 to get it
  • dropping its insured 5-year fixed rate to 3.09%
    • Once again, this undercuts all the Big 6 banks’ published rates
    • It’s not available to existing customers
    • HSBC’s 5-year uninsured rate rises from 3.19% to 3.34% (providing its competitors some relief).

If you’re waiting for a major bank to match all of this, don’t wait too long.

Insured Rates are Even Lower

Keep in mind, there’s a slew of variable rate options below 2.39% for those needing a default-insured mortgage or those switching their mortgage to a new lender.

Here are all the current best variable rates in Canada (make sure to enter your correct home value and mortgage amount as rates vary by loan-to-value ratio).

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  • Anthony says:

    Our mortgage comes up for renewal in September (not insured)–watching this from the sidelines for now is driving me crazy!

    • The Spy says:

      Hey there Anthony, If you want a variable mortgage then — barring some unforeseen crisis that rocks financial markets — the odds are good that September discounts will be close to today’s.

  • BC Ratespy Reader says:

    RBC just approved my variable refinance P-1 with $700 Westjet dollars and no fee transfer. Happy camper here!

    My mortgage specialist is pretty good I have to say..

  • Hassan says:

    Hi Spy,

    I am with BMO and my term is up in September. Do you know if BMO’s 2.45 per cent is still only for new customers? If so, can I sign up now with one of the other banks and switch to them in September? Thanks.

    • The Spy says:

      Hi Hassan,

      BMO says “This offer is not available for renewals of existing BMO mortgages.”

      I’m sure RBC or TD would be happy to have your business. They can hold rates up to Sept 14, as of today.

      Check with a broker too. You might find an even better deal for a September close.

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