As Canadian banks slash their mortgage rates to new lows, a developer in B.C. is offering a dollar-a-day mortgage to interested home buyers in the Metro Vancouver region as incentive to buy in.
WestStone Group and Platinum Project Marketing are offering the deal for buyers of a luxury condo in the Vancouver suburb of Surrey. After the first year, buyers must start paying down the rest of their mortgage at the regular rate.
Vince Taylor, of Platinum Project Marketing, said the move is critical to entice prospective buyers who are savvier than ever.
"If we're not one step ahead; if we're not fully prepared; if we're not ready to go a mile further than the next guy, we won't sell any condos," he said.
The deal comes as the Bank of Montreal and TD Canada Trust slashed their mortgage rates this week. Both banks cut their rates, posting a five-year fixed-term rate of 2.79 per cent.
CTV Financial Commentator Pattie Lovett-Reid said the new rates were posted just in time for the red-hot spring housing market.
"Let the price wars begin, because we're heading into the spring housing market, and markets such as Vancouver and even Toronto are still very hot," Reid said.
Business analyst James Doak said the new rates are virtually unprecedented.
"The bank is actually starting to pass on the full amount of the Bank of Canada reduction to their consumers," he told CTV Vancouver.
Jim Kwon, a mortgage consultant, agrees, noting that he's surprised at how low the rates have fallen.
"I'm kind of shocked where they are now," he said. "Because when rates were four per cent a number of years ago, we heard they'd never come lower."
But analysts warn that the low-rates may come with many restrictions, which if broken, may result in stiff penalties.