CMHC pinpointed some encouraging trends for brokers in its recently released 2016 Mortgage Consumer Survey (MCS).
Among other gains, brokers boosted their market share noticeably among renewers and refinancers. Part of those gains are thanks to increasingly informed consumers. In other words, folks are becoming less likely to merely accept lender renewal offers at face value.
But CMHC’s report wasn’t all rosy for brokers. For one thing, they lost four points of share among their core first-time buyer segment. That’s a number we’ll be keeping very close tabs on in upcoming Mortgage Professionals Canada and CMHC data.
Below are 10 other MCS stats that matter, in no particular order…
- Lender loyalty is dropping — 81% of those renewing remained loyal to their lender, down from 86% in 2015; 73% of repeat buyers stayed with their lender, down from 77% in 2015. The main reason people switched mortgage providers, says CMHC, was to get a better interest rate.
- Brokers seized more renewal business — 26% of those renewing used the services of a mortgage broker, versus 21% in 2015.
- Brokers won more refinance business — 38% of those refinancing used the services of a mortgage broker, versus 33% in 2015.
- Renewals spell opportunity — In the past year mortgages were split three ways as follows: 62% renewals, 18% refinances and 20% purchases. Brokers and bankers alike are working harder than ever to woo renewers. Expect lenders to make earlier renewal offers at better rates to counter this trend.
- First-time buyers still vital — Of the 20% of mortgages that were for purchases, the majority (11%) were first-time buyers and 9% were repeat buyers. Young buyers are most concerned by unforeseen closing costs and overpaying for a home, says CMHC. These are two areas where sound professional guidance creates loyalty.
- Rate site traffic surges — 44% of those researching mortgages online used a mortgage comparison website. That compares to just 16% of all mortgage consumers a few years ago, according to Mortgage Professionals Canada.
- Social media gains — 29% of consumers used social media to gather mortgage information (vs. 20% in 2015).
- Online ads work — Almost one-third (32%) of consumers said they found their broker website through online advertising. That’s about half as many as the number who are referred, but it’s growing.
- Satisfaction levels diverge — 83% of recent buyers were satisfied with their lender versus 77% who were satisfied with their broker. This is the first time in a while that we remember these numbers deviating materially.
- Quality advice pays — Providing advice on long-term mortgage strategies can lead to an 85% increase in the likelihood of new business (from consumers who recommend their mortgage professional to family and friends). Why not provide clients a personalized written mortgage plan with every mortgage? Some of the country’s most successful mortgage brokers do just that.
Survey background: CMHC’s survey was conducted online and polled 3,006 recent mortgage consumers who had undertaken a mortgage transaction in the preceding 12 months. CMHC has conducted this survey since 1999.