If you’re a regular Mortgage Broker News visitor (or BNN viewer, or Toronto Star reader), the name Robert McLister will no doubt be familiar. McLister’s most famous endeavour is RateSpy.com, one of Canada’s busiest rate comparison sites, but with more than a decade spent in finance and a dozen years under his belt in the mortgage space, McLister has become a go-to expert for news outlets like MBN when they are in need of insightful commentary on most issues facing the Canadian real estate and mortgage industries.
After leaning on his experience for so many of the articles published here, MBN thought it was time to pull back the curtain and get a look at the man behind the quotes.
Mortgage Broker News: Why mortgages? What is it about the mortgage space that makes you want to think (and talk and write) about it constantly?
Robert McLister: With mortgage reporting, if you get your analysis right and have a big enough platform, you can help literally hundreds of thousands of people get to a better financial place. There are countless good and honest consumer advocates in mortgages and banking. But there are also forces purposely working to keep consumers under-informed. Countering that, by writing about the mortgage business with transparency, shifts power back to consumers. That's my way of justifying my existence and scoring karma points, so I don't come back as an ant in the next life.
MBN: How would you describe the average RateSpy visitor? How do you keep her happy?
RM: Most of our readers are savvy, educated, self-directed mortgage consumers who know mortgages aren't a level playing field. They come to gather intelligence on mortgage selection and get ammunition to negotiate their rate. We serve these folks something that no one else gives them, objective data and analysis on the entire rate market, not just on lenders who pay to be promoted.
MBN: Rate-hunting sites like RateSpy attract a lot of eyeballs. Why are Canadians so interest rate-obsessed? Is it because they think a low rate is the only sign of a good mortgage?
RM: It took me years as a mortgage professional to fully grasp all the elements impacting total borrowing cost. A layperson has little hope of digesting all these factors, so they focus on what's easily compared, a three-digit number. They know there's more to a mortgage than just rate, but what they intuitively understand the most is that paying 1/4 point more on a $300,000 loan for five years is expensive. They figure they better do something about it. They start researching on Google and see rate sites topping the organic listings. So they start there.
MBN: Related to that previous question – and no disrespect intended – do you think rate comparison sites may contribute to Canadians’ lousy financial literacy by instilling in them the idea that rates are the most important part of the mortgage process? (Or is that something the banks are doing fine on their own?)
RM: Imagine a world with no mortgage comparison tools, where people had to call dozens of lenders one by one to find a good deal, where lenders quoted inflated posted rates, where brokers could not openly advertise aggressive bought-down rates that save consumers thousands. Would that make for a better world?
Rates actually are the most important part of the mortgage selection process, assuming you're well qualified and informed – our target audience. The reason is because rates give you a logical starting point. Rates are easily ranked, enabling you to begin your research with the lowest rate, then cross providers off the list one by one until you find one that meets your service, advice, and product needs.
Everyone knows there's more to a mortgage contract than rate. That's why we endlessly foster mortgage literacy by writing about prepayment penalties, refinance restrictions, fees and a host of other mortgage terms that impact cost of borrowing. I've penned over 3,000 mortgage articles over the years. Hopefully they've contributed to something.
MBN: As either a broker or an observer, where do you think consumers need more education when it comes to personal finances/real estate/mortgages?
RM: Mortgage shoppers need more help quantifying how contract terms affect their overall potential borrowing cost. How much should I value a better penalty formula over a 15 bps lower rate, given a one-in-three chance I sell my home in two years? That's one of the infinite life scenarios that can heavily impact personal finances. Being informed enough to answer these questions could save a mortgagor tens of thousands over a lifetime.
MBN: Are you worried at all by the heightened level of buying activity seen over the past three months of recession, high unemployment and decreased immigration? Are these purchases being fueled by anything besides low rates and FOMO?
RM: Add record-low resale inventory to that list. I think anyone has to be concerned by what we're witnessing. The one bright spot is that continued housing imbalances are forcing policymakers to acknowledge the urgency needed to create middle-class housing supply. They're making strides in the low-income segment, that's great. Meanwhile, millions of hardworking middle-class Canadians are left hurting as extreme home prices leave them unable to improve their quality of life and diversify their retirement savings.
MBN: Give me one specific, practical way Canada could increase housing supply significantly in the next five to 10 years. What are the odds of this happening in the next five years?
RM: Having ten years to work with would allow for the fast-tracking of ultra-high-speed transit. We need to rapidly deliver more Canadians to/from employment hubs to regions with lower-cost buildable land. In five years, tri-level (federal/provincial/municipal) planned land acquisitions could jumpstart high-density residential development zones with fast shuttles to transit hubs. Holding population trends constant, it's all about supply, and getting people to lower-cost supply quicker.
MBN: I know you’re not a huge fan of the CMHC’s attempts to limit demand, but are there any demand-suppressing measures you would be in favour of? What about limiting property ownership to people with either permanent residence or Canadian citizenship?
RM: Regulators have thrown the book at the market. It may have improved financial stability at the margins, but it's done nothing to solve our biggest housing problem. All it's done in that regard is temporarily defer buying and (prior to the coronavirus) create rental imbalances. The housing crisis has only one practical long-term cure: solve for supply.
Limiting foreign ownership is politically popular but carries meaningful economic side effects. More importantly, it would improve affordability only incrementally in the resale market. Foreign buyers account for a low single-digit percentage of sales nationally. Albeit, few would argue with limiting the number of properties that non-residents can own.
MBN: What are three things about you that readers would never guess?
RM: I'm too hooked on Call of Duty. I'm one of those crazed animal lovers that will stop traffic in an expressway to save a stray turtle. I'm about to give up on the Detroit Lions.