Brokers have their work cut out for them, according to a recent online poll that suggests the majority of Canadians look to the Big 5 to finance a major real estate investment.
As much as 64 per cent of respondents to a recent online poll question by the Canadian Real Estate Wealth Magazine said they preferred to get loans from one of Canada’s Big Five rather than go through a mortgage broker.
While interest rates such as the 3.09 per cent offered by BMO on its five-year fixed may be very attractive, broker say they can easily match these rates and provide a wider-degree of flexibility around terms for borrowers.
Alternative lenders ranked second in the poll results, with 29 per cent. Investors can often get loans from other kinds of financial institutions or professionals, and although their rates may not be on par with those offered by banks, they still offer stability and a decent level of service to their customers.
These findings appear to dovetail with a recent report from Ipsos Reid indicating that credit unions consistently overtake major banks in customer satisfaction polls.
Tied for last place with 3 per cent each were private lenders and joint venture deals. That may surprise some investors now frustrated by new bank lending guidelines, which have made it harder for all investors with more than five properties to get additional financing. Many are now turning to joint ventures as a way of overcome that hurdle.
Still, going to the bank remains an option for some veteran investors – specifically those who have incorporated their businesses and are now heading to the commercial divisions of the big banks, where the number of doors is less of a concern.