A new survey commissioned by TMG is giving brokers a shot in the arm, suggesting almost a third of today’s renters are planning to become homeowners in the next two years – most with the help of a mortgage broker.
“That’s a large pool of potential buyers poised to have a significant impact on real estate sales and the mortgage industry,” said Mark Kerzner, president of TMG The Mortgage Group Canada, pointing to results of its recent online survey conducted by TNS Canada. “Buyers recognize mortgage brokers provide a fast, efficient way to access a wide variety of mortgage options and solutions, in most cases at no additional cost. Saving time and money is important, especially to first-time purchasers.”
The study, relying on a “representative” sampling of Canadians, found that 28 per cent of current renters are planning to buy in the next two years, equivalent to a potential increase of 12 per cent in demand for homeownership. Just as compelling for brokers, 91 per cent of respondents planning to buy say they would likely use the services of a mortgage broker.
That’s good news for brokers looking to grow new-purchase originations during a slowing market. They’re also more likely to get the lion’s share of that renter’s business, given historically high penetration into the first-time buyer market.
Still, broker access to low rates will also figure prominently in their ability to successfully win renter business, especially those young buyers more inclined to begin and end a mortgage search online. That arena is increasingly dominated by rate sites.
Still, the study suggests Canadian renters are equally as concerned with mortgage features as they are with mortgage rates.
“The same percentage of renters indicated the ability to repay with as much flexibility as possible was as important as obtaining the lowest possible mortgage rate,” Lawrence Smith, professor emeritus in economics at the University of Toronto, said. “This demonstrates the strength and quality of Canadian borrowers. It means Canadians are really thinking about paying off mortgages as opposed to what we’ve seen with sub-prime mortgages in the U.S. which was all about rate, cash-flow and just getting approved.”