“I think they’re just fighting back because we’ve taken a big chunk of their portfolio,” Harold Grant of Dominion Lending Centres
Ridgeway Group told MortgageBrokerNews.ca. “They don’t support the broker channel and I don’t think it’s a bad thing because they’re feeling the need to fight back.
Canada’s biggest bank – and the country’s largest mortgage lender -- is now offering real estate agents $1,000 for every five first-time homebuyer referred to an RBC specialist.
It’s a segment that has become increasingly competitive following several rule changes that have made it more difficult for first-time buyers to break into the market.
“If you think about the context of the broad market, and slowing mortgage growth, understanding where there are pockets of opportunity is really important for our business,” Erica Nielsen, vice-president of home equity financing at RBC told the Globe and Mail. “The first-time home buyer is an opportunity for us.”
The program is set to run from May 1 until September 30 and is part of a comprehensive rewards program. Real estate agents can also collect points for referrals that can be redeemed for plane tickets, gift cards and merchandise, according to the Globe and Mail.
The bank requires realtor participants to sign an agreement stating they will disclose the details of the promotion to clients.
RBC isn’t the first bank to offer a referral bonus to realtors who drive mortgage business through the door.
offered a similar incentive to realtors in 2011 by offering 50-basis point referral fee for sending mortgage seeking clients to a branch.
Brokers may view RBC’s newly-minted mortgage incentive program – that offers realtors a bonus for referring first-time home buyers -- as a sign that the broker channel has the bank worried about market share.