The 2013 CMHC Consumer survey reinforces the idea consumers are increasingly reaching for the Internet, but also suggests they’re reaching for mortgage brokers although not always to close the deal.
“More than half of recent buyers (56 per cent) reported contacting at least one lender or broker to learn about mortgage options (46 per cent contacted at least one lender and 32 per cent at least one broker),” says the report, released this month. “On average, 2.9 lenders and 2.1 brokers were contacted.”
Unfortunately, those consumers using a broker’s services dropped to 23 per cent for 2013, compared to 27 per cent in 2012.
It’s also worth noting that one in five recent buyers contacted at least one lender and one broker during the process of arranging their mortgage.
Still, the bright spot for mortgage brokers are signs they are holding their own in market share among recent buyers. The CMHC survey shows 49 per cent of all mortgage originations among first-time buyers and 34 per cent among repeat buyers are accounted for by brokers.
Twenty-six per cent of those looking to refinance opted for a broker, with 17 per cent choosing a broker to arrange the renewal.
The survey shows that 66 per cent of mortgage consumers look to online information sources to get their information on mortgage options and features, and yes, a full 84 per cent chose interest rates as the most popular search term.
But what is growing in popularity is the usage of online mortgage calculators.
“Of consumers who went on-line for mortgage information, nearly two-thirds (63 per cent) used a mortgage calculator
,” says the report. “Almost half (47 per cent) reported using a calculator from a lender website, followed by 17 per cent using a CMHC calculator, and 13 per cent using a calculator from a broker site.”
Of those using the online calculators, two-thirds wanted to determine the amount of their mortgage payments, while 39 per cent used a calculator that compared two or more mortgage offerings – 36 per cent were trying to determine how much mortgage they could afford.
Loyalty among first-time buyers remains low, with only 54 per cent arranging their mortgage with the financial institution they were dealing with the most. Of those who decided to switch lenders, 44 per cent cited a better interest rate as their reason.
First-time buyers are leading the way in the use of mobile devices at 38 per cent, with more than half of 18-24 year old consumers choosing the hand-held devices as their method of choice (53 per cent).
Of the apps used, 71 per cent consisted of some kind of mortgage calculator.
Of particular interest to mortgage brokers, the numbers for recent buyers show a high percent are now looking at different products online when shopping for a mortgage.
Seventy-one per cent researched terms and conditions, 60 per cent discussed the pros and cons of various mortgage products and 59 per cent compared interest rates.