It’s got the best 1-year rate in the country.
It’s got the best conventional 2-year rate in the country.
It’s got the best 3-year rate in the country.
It’s got the best 4-year rate in the country.
It’s got the best conventional 5-year fixed refinance rate in the country.
It’s got the best variable rate at 80% loan-to-value in the country.
It’s got the best HELOC rate in the country.
This is what shunning bricks and mortar lets you do. And it’s how upstart lender, motusbank, offers such incredible rates.
The online-only lender and subsidiary of Ontario’s biggest credit union slashed its fixed rates on Tuesday. Its one-, two-, three-, four- and five-year fixes rates are now all 2.49%.
The company is determined to establish itself as a rate leader. “We are very serious about building a brand focused on member well being,” says motusbank COO David Baldarelli. “Offering great value on products and services is one way we watch out for the well being of our members and we certainly intend to remain focused on this.”
How It Does What It Does
Many of motusbank’s rates look so low as to be default-insured rates, which are usually cheaper than conventional rates. But they’re not. The bank funds all of its own mortgages (it doesn’t securitize, says Baldarelli) and all of the bank’s rates apply to all loan-to-values.
Its secret sauce—besides transparent, dirt-cheap rates—is a rock-solid parent company (Meridian Credit Union), strong online marketing (its affiliate program is excellent), low HR costs and lots of automation. Regarding the latter, a few computer servers can process more mortgage applications than 100+ branches process in a year. Unlike probably 98% of lenders out there, the bank has no legacy cost structure to weigh it down.
motusbank’s cost advantage, and that of its close competitors, should have most traditional lenders worried about market share. Since inception, motusbank mortgage rates have generally been in the top 10 percentile of the nation, often leading the country in multiple term categories. And we get the sense that it’s not about to let up.
Spy Tip: motusbank officially charges a 10 bps rate premium for refinances. But it will sometimes waive that surcharge if you ask. So ask!