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Mortgage rates hit new low as Investors' Group pushes variable rate below 2%

TORONTO - Just when you thought mortgage rates couldn't get any lower, they have.

Investors' Group is offering a 36-month closed, variable-rate mortgage at 1.99 per cent, well below the current standard of around three per cent.

The mortgage is also well below the 2.99 per cent level that drew sharp criticism from former finance minister Jim Flaherty when BMO first tried it, because he was worried it would trigger a damaging housing bubble.

Joe Oliver, who took over from Flaherty, has said he has no plans to intervene in the setting of mortgage rates, calling it a "private'' decision by lenders.

Royal Bank made waves in January when it lowered its rates on several fixed-rate mortgages by 10 basis points, bringing its five-year closed rate to 3.69 per cent. It now sits at 4.94 per cent, while the variable five-year rate is at three per cent.

RBC said at the time the rates were lowered to match competitor pricing, and several other big banks followed suit.

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