Google launches mortgage rate site

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Google has officially launched its own American rate site, but what sort of impact would it have in Canada?

“I think what you would end up with is a more polarized business, with people focusing on rate and others focusing on service,” James Smythe, a broker with Dominion Lending Centres Central, told MortgageBrokerNews.ca. “If Google were to launch a rate site in Canada I think it would make it harder on brokers who focus on rate because clients will have more access to the market.”

Google announced Tuesday the launch of a mortgage rate site as part of its “Compare” brand, which boasts an auto insurance comparison tool as well.

“Nearly 1 in 2 borrowers still don’t shop around for their mortgage and often feel like they don’t have enough information to make an educated choice,” said Nicolas Wk, director of product management and Google Compare, according to the Silicon Valley Business Journal. “Google Compare for mortgages provides a seamless, intuitive experience that connects lenders with borrowers online.”

The tool is currently available in California, and a larger scale launch is planned for the future.
The model is similar to the one used by various rate sites in Canada.

Google told Tech Crunch “participation in Google Compare is based on a flexible cost-per-lead (CPL) model.”

If – and it’s still if – Google decides to roll the product out in Canada, it could provide some challenges for brokers.

Many potential broker clients begin their search online, and Google is the leading search engine. Having its own rate comparison tool could result in the highest rated searches pointing to its broker affiliates.

And that could impact not only broker business, but existing rate websites as well.
  • Ron Butler on 2015-11-25 9:34:26 AM

    If you think this is a wake-up call for mortgager brokers just Google "Quicken Loans - Rocket Mortgage" human beings are completely removed from this new Quicken Loans offering.

  • Jake Abramowicz on 2015-11-25 10:08:06 AM

    @Ron Butler couldn't it be argued intelligmortgage is already going after the same model by a DIY approach?

  • Anthony C. on 2015-11-25 11:06:23 AM

    @ Ron

    Ron, I gotta ask your opinion on this matter...since your firm is one of the lead online/discount brokerages, how do you think this proposition would fare in Canada and do you think this is the death knell for companies such as Ratehub, were Google to launch in Canada, thus taking out the middleman in the process?

  • Pierre B on 2015-11-25 11:47:20 AM

    it depends on what rate they are going to use in canada: if it is published rate or brokers discounted rates and will they get a license from each provinces? am I to understand that anyone can published discounted rates as long as they transfer the request to a legitimate broker?? will the banks in canada allow google to access brokers discounted rates? if so they will also enter into a war and we the brokers will be stuck with the conditions not spelled out on google site???

  • Ron Butler on 2015-11-25 4:34:15 PM

    It is unlikely we will see a Google Mortgage Website in Canada next year or even by 2017. It should be understood that Google uses lenders like Lending Tree to supply rates and product: there is no Bank of Google although I think there may one someday.

    Rob can speak for himself but I think Intellimortgage certainly looks at what Quicken Loans does and so they should because Quicken are stone geniuses. Quicken spent a couple of hundred million on Rocket Mortgage and had 450 people working on it for several years therefore I cannot see anyone in Canada just building a close duplicate anytime soon.

    Would Google Mortgage replace RateHub, good question, likely over time it would erode other rate sites but 3 or 4 years from now online mortgage origination could be much bigger than it is today so that growth might offset the coming of Google to allow a number of sites to survive.

    One thing I know for sure, the future of mortgage origination is online.

  • race to the bottom on 2015-11-27 8:00:28 PM

    interesting indeed, it will come to Canada, the banks will buy into it to gain market share while controlling even more of the market

  • Jeremy on 2015-11-29 2:14:08 PM

    Respectfully, I 100% disagree with Ron. Sure, there will always be a small segment chasing price, but it will NEVER replace the role of an advisor.

  • Agent on 2015-11-29 2:50:19 PM

    Rate sites are good for competition.
    Unfortunately, some rates are misleading consumers on these sites and it should stop.
    Some Brokers are now advertising rates that have a cash component rebate and advertising the rate which includes the cash rebate. The contract rate is higher that the lender issues.
    I wonder how FSCO views this as it is misleading advertising, and misleading the consumer.
    I wonder what the disclosure looks like ?
    I guess the phone rings.

  • Ron Butler on 2015-11-30 12:21:56 PM

    Banks have offered cash back mortgages for years, the consumer uses the cash back as an immediate pre-payment on their new mortgage so the net interest cost for the term drops and the results are great for the clients. This is a decades old practise so no one has any problem with it.

    I don't think that advisors will cease to exist, I never have thought that they would but advisors will spend more time communicating with clients online and the pure online origination of mortgages will grow and grow.

    Our industry needs to wake up, over the weekend it was widely reported that Black Friday store sales were down and online was up. These are often sales of items like clothes, which you would expect people would want to see and touch. I don't think you can check the colour and texture of a mortgage so that really leaves it open to question why would consumers not want to do a completely conceptual purchase online?

    Everyone in an entrenched business model often takes the stance "No!! my model will always exist!!" Check in on: Sam the Record Man, Kodak, Polaroid, Time Magazine, Barnes and Noble.

    I do NOT believe that mortgage brokers will disappear but I believe the will work face to face far less, they will be less "advisors" and more "implementers".

    If you are not planning on how to switch to full online apps, mobile apps in the Android and Apple store, Docu-sign web based electronic processing document and signature processing; you probably need to start.

  • Dave on 2015-12-01 12:17:27 PM

    Ratehub is finished if Google comes here...

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