More and more Canadians are prying themselves loose from lenders at renewal, according to CAAMP’s new consumer survey -- something that hasn’t translated into more business for brokers, but has highlighted a growing challenge for them, said a Toronto agent.
“It used to be at a party I’d tell people what I do and they didn’t fully understand, but that’s changed and people are far more aware of interest rates,” Brad Compton, with Invis, told MortgageBrokerNews.ca. “With the Internet, it’s become far easier for some consumers to arrange their own renewals or, even, refis, even if it’s just a case of them finding a rate online and then walking that into another lender.”
Among the 2,000 consumers survey last month, 21 per cent of those who renewed their mortgages in the last 12 said they’d changed lenders. That represents an increase from the 17 per cent a year ago and an even bigger jump from 2009 when 12 per cent of those surveyed said they’d done the same.
Mortgage professionals haven’t necessarily benefited from the growing number of renewal and refi defections.
The broker share of that business remains unchanged from last year’s 19 per cent, suggests the fall report.
Those static numbers support the observations of Compton and others around the growing willingness of consumers to do their own legwork at renewal and on refis, in most cases turning to lender websites to compare rates.
That homework then prepares them to go into the market and negotiate better rates than with those being offered by their current lenders.
CAAMP’s new report also backs that up. It suggests about 32 per cent of Canadians altered their mortgage in the last year and nearly two-thirds of them refinanced or renewed. Just under 80 per cent of those renewing earned a better rate.
“As a measurement, the survey results perhaps capture the number of consumers who are now prepared to arrange their mortgages on their own, at least in part,” Compton said. “But what it isn’t capturing is their success in getting mortgages that match their needs.”
It may fall to the broker channel to move consumers beyond rate as a way of reaffirming their value proposition.
“You can shop online all you want, but there’s more to a mortgage than rate,” said Compton. “I deal with a lot of clients who want to get out of a mortgage because however it is they got into their present mortgage – whether by themselves or online – it just doesn’t fit their needs.”