TD Bank is making a push for greater share of the home equity line of credit market.
For Teri Currie, group head of Canadian personal banking at TD, the intention is to solidify the lender’s place at the top across all facets of banking. Moreover, Currie says that TD’s position at No. 4 for hybrid HELOC-mortgages isn’t good enough.
“Our goal is to be the undisputed leader in all categories of Canadian banking,” Currie told Bloomberg. “We are below our embedded growth opportunity in that product in particular, so I continue to feel comfortable that on a relative basis we’ll have pretty good growth.”
In 2018, TD’s home loan portfolio grew 6%, but Currie intends to raise it by “mid-single digits” this year. She also noted that the majority of TD’s borrowers regularly make principal payments on the amortizing loans.
Of TD’s two types of HELOCs, a non-amortizing product and the hybrid, the latter grew 33% last year to $44.1 billion. In fact, during Q4 2018, 90% of new HELOCs went to the bank’s existing customer base, which helped its market share growth reach 10 consecutive months.
Curiously, however, TD Bank’s HELOC products are not available to the broker channel like Scotiabank’s is. While it’s too early to say, National Bank’s new partnership with M3 Group could include its HELOC products, which the bank used to offer the broker channel and which were very popular.
But TD might also not need open its HELOC product suite to mortgage brokers.
“If you talk to a TD Bank employee or mobile mortgage specialist, they’ll tell you that you don’t have to use it,” said Ron Butler of Butler Mortgage. “All mortgages are collateral mortgages anyway and registered for a larger amount than the one you’re getting because it’s estimated for the home value. So if your home is worth a $1 million but your loan is only for $500,000, there’s lots of room for a HELOC. You know it’s there and you’re constantly advised it’s there.”