Name: Robert McLister


Biographical Info: Robert McLister is one of Canada’s best-known mortgage experts, a mortgage columnist for The Globe and Mail, editor of (CMT) and founder of intelliMortgage Inc. and Robert created CMT in 2006. The publication now attracts 550,000+ annual readers, is a four-time Canadian Mortgage Awards recipient and has been named one of Canada’s best personal finance sites by the Globe & Mail. Prior to entering the mortgage world, Robert was an equities trader for eleven years and a finance graduate from the University of Michigan Business School. Robert appears regularly in the media for mortgage-related commentary (recent coverage: He can be followed on Twitter at @CdnMortgageNews


RMA and BFGBroker Financial Group (BFG) and Real Mortgage Associates Inc. (RMA) announced today that they plan to unite. The two brokerage companies say they’ll enter a joint share purchase agreement and take ownership in the other.

The reported benefits of the deal are sharing of technology, administrative resources, payroll, compliance and corporate relationships. Of course, with mortgage revenue being volume-based, the combination should also help the two garner slightly better compensation from certain lenders. “The industry pays on volume,” says BFG CEO Joe Rosati.

Both firms are relatively small as far as broker networks go. The companies haven’t disclosed their volume but we hear it’s in the $1.5 to $2 billion neighbourhood, combined. By teaming up, the two will also improve their economics with financial partners for greater cross-sell opportunities.

Both organizations will continue to operate their separate brands. Some might think that focusing finite resources on one brand would be wiser, but Rosati says the two firms don’t want to disrupt their brokers’ branding and operations.

The advantage that BFG heralds most is its “Scarlett” broker technology, with its CRM, digital marketing and back-office functionality. (Here’s a look at “Scarlett.”) “A partnership with BFG gives RMA access to a piece of technology that is vital to the future growth of our organizations,” said RMA President David Yuzpe in the company’s release today.

Brokerage consolidation is well underway in the mortgage business. This deal is just the latest example and the trend will only intensify. In a thin-margin industry that measures profits in basis points, scale can make or break a business model. The big boys (e.g., DLC, VERICO, Mortgage Alliance, TMG, etc.) are all looking to capture the highest producing agents. Hence, smaller shops may increasingly try to protect themselves and bulk up, to make their offerings more compelling. In that vein, this combination appears to be a sound move for both BFG and RMA.


Divorce FB The nation’s biggest credit union, Vancity, is pulling out of the mortgage broker channel.

The Vancouver-based company sent an email to notify brokers this morning. It has been in the mortgage broker channel since 1991, when it acquired Citizens Trust Company. The channel was administered through Vancity’s subsidiary, Citizens Bank, until 2007 when it was transferred directly to Vancity.

When asked why it was leaving, John Derose, Vancity’s Director of Mobile Sales, explained:

As a member-owned financial co-operative we place a high priority on building strong relationships with our members. The business we generate through our mortgage broker channel often does not allow the best opportunity to build these relationships and we want to focus on those channels that do.

We are able to make this move in large part because our mobile [sales force] capacity has grown significantly since the 1990s. Historically, people have used brokers to get mortgage support and advice at the times and locations that suit them best. Now, with our mobile capacity, we have an expert capability to do this in-house.

Finally, the industry as a whole has been moving towards greater transparency and our members and prospective members can always see our rates posted on This allows people to determine the best rates without necessarily having to use a mortgage broker.

Vancity did have some success with brokers. Reportedly its Victoria, B.C. market penetration was thanks in large part to broker-originated customers.

That aside, and while it’s sad to see a big brand name leave the market, Vancity was truly a marginal player in the broker space. It has been for a long time. As of the first quarter, it was only the 27th largest lender in the channel according to D+H data, a ranking it’s been more or less stuck at for years. Vancity’s overall broker market share was a mere speck at one-tenth of one percent.

Part of that is because of service issues, say Vancouver brokers we interviewed off record for this story. The other part is price competitiveness. Its broker rates have been absolutely horrendous in the last year. Its 5-year fixed, for example, has been over 3.00% for months. Meanwhile, it’s openly advertising 2.79% on its website for the general public.Vancity

Clearly the company didn’t want much broker business and we suspect this decision was in the back of its mind for a while. “The mortgage broker channel represents less than 5% of our overall mortgage portfolio,” said Derose. “We are confident we can replace this business through our branches, our call centre and through our mobile mortgage specialists.”

Naturally, brokers have a different take.

“I think it’s regrettable for a couple of reasons,” said Paul Taylor, CEO of Mortgage Professionals Canada, the country’s main broker industry association. “For our member brokers and the growing number of consumers who choose to use a mortgage broker, Vancity will no longer be an option to consider. With the difficulties many consumers are already facing in the real estate market in Vancouver, less financing options is not a good thing.”

Taylor went on to add, “It is also a disappointing that Vancity couldn’t find a way to make their broker relationships work for them…As other new entrants to the mortgage broker channel are finding, brokers offer a great way to access portions of the marketplace that direct marketing often doesn’t reach. Their individual customer relationships also ensure product suitability when presenting options, simplifying internal underwriting and approval processes.”

One of the new entrants Taylor is referring to is Manulife Bank. The bank invested millions of dollars to enter the broker channel earlier this year, and has reportedly been pleased with its performance to date. Brokers currently account for roughly one-third of all mortgage originations in Canada.

“I hope Vancity revisits this decision soon and reconsiders its position,” Taylor added. “As broker market share grows, it’s difficult to understand why any lender wouldn’t want to be a part of it.”


…Robots are racing to replace mortgage brokers.”

Like it or not, we’re going to see more and more headlines like this.

This particular story comes from the UK, where British entrepreneurs have a head start on automating mortgage services.

On this side of the Atlantic, brokers seem largely unconvinced about robo-lenders eating their lunch. This recent podcast is one example. “Am I concerned that I’m going to be disrupted out of a job by an app? I am not,” said co-host Dustan Woodhouse, arguing that a human touch is needed because mortgage clients have unique requirements and large sums of money at risk.

Co-host Scott Peckford added, “The people who focus on giving advice and can add value to a transaction are still going to have lots of work…Not everybody wants to do E*Trade.”

No doubt, most successful established brokers take comfort that their existing high-touch model and referral sources will continue streaming a fountain of business. But it’s a different future facing many newer agents. I’m talking about those who operate run-of-the-mill low-tech brokering practices without the benefit of large tappable client databases. For them, automated mortgage systems (and their deep-rate discounts and online decision support tools) may pose greater danger.

Then again, some in our business pooh pooh the entire premise of automation slashing rates and commissions. They hold that mortgages are too complex to be widely automated, suggesting that most consumers need (and will gladly pay a premium for) one-on-one advice.

Well, somehow firms like Betterment have figured out how to code self-serve platforms and amass up to $5 billion in customer assets. And they’re doing it in just as complex a business: investment management and asset allocation. They’d probably be the first to tell us that AI is easier to program for prime mortgages, where fewer variables go into product selection.

How much brokers worry about all this will vary on the uniqueness of their business model, their technology, their referral networks, their database size and so on. Fortunately for our profession, things like non-prime underwriting, lender follow-up and mortgage fulfillment (i.e., the closing process) are harder to automate, assuring a place at the table for traditional brokers with Alt-A files, “B” deals, time-sensitive conditional purchases, portfolio rental financing, commercial financing, etc.

If “A” business is your meat and potatoes, however, the world is about to get more interesting. “Your referral relationships aren’t going to dry up in the next 6 months,” writes mortgage technology expert Jesse Passafiume. “…but there will be an increasing number of digital savvy competitors that earn business—your business. The time to adapt is now.”


Justice FBA few months back, B.C.’s mortgage broker regulator fined and banned Jorawar Singh Gosal from the broker industry for 10 years. Mr. Gosal admitted to doctoring a client’s income documents to get his mortgage approved.

Given Gosal’s admission, we asked FICOM if it had referred his case to the authorities for prosecution (hoping it would say “yes”). Unfortunately, FICOM’s spokesperson couldn’t speak to the specifics of the case, citing legal reasons.

He did say this: “As a matter of course, in any file where there may be potential criminal activity or breaches in other regulatory areas, we refer files to the appropriate agencies, regardless of whether or not they choose to pursue the information.”

So that’s good. We’ll infer that FICOM sent Gosal’s case to law enforcement.

Make no mistake, altering documents to deceive a lender for personal gain is a criminal offence.

According to the Department of Justice:

Subsection 366(1) of the Criminal Code prohibits forgery, which is where a person “makes a false document, knowing it to be false,” with the intent that the document should be acted on as though it was genuine.

Under section 321 of the Code, “false document” is defined to include: a document “that is made by or on behalf of the person who purports to make it but is false in some material particular”. The offence of forgery is complete, where the person who makes it knows it is false, and where they intend that some other person act on the document believing it to be genuine.

Subsection 368(1) prohibits the use of a forged document as though it were genuine. The offences of making a false document and using a false document are both punishable by a maximum of 10 years in prison.

Under section 380 of the Code, fraud comprises two elements: (1) deception or some other form of dishonest conduct, coupled with (2) deprivation or risk of deprivation of another person’s property. Mortgage-related fraud is subject to the Criminal Code and is punishable by a maximum of 14 years in prison, where the value of the fraud was over $5000, and by a maximum of 2 years where the value was less than $5000.

So, given all this, we could assume Gosal was investigated by law enforcement and that they’re taking all appropriate measures. Or can we?

So far there’s been no formal charges laid that we could find in court records. Perhaps it’s just a matter of the criminal investigation needing more time.

Mortgage Fraud_FBWhat we do know is that consent orders are not enough. Document fraud usually gets handled internally in the lending industry, without the benefit of public exposure (which would strengthen deterrence). When it is referred to law enforcement—which by no means happens in the majority of cases—it’s all too often not pursued due to “insufficient resources.” That’s exactly what keeps the back door open for bad apple brokers.

Weasel agents need to be eradicated from our business, not only for the risk they cause lenders and borrowers, but for degrading consumer confidence in our profession. Regulators need to reward whistleblowers, like the OSC now does, and make offenders pay for those rewards.

It’s time to make examples of such embarrassments to our industry. Criminals fear jail time more than a $4,000 fine and a licence ban (which should be a lifetime ban, by the way, not just 10 years).

While we’re on this topic, whatever became of those alleged fraudsters who sent bad paper to Home Trust? Nary a peep about whether any of them were charged. That’s unfortunate. Really…and truly…unfortunate.



Analysis FB

It looks like it’s going to get harder (and/or more expensive) to get approved for a mortgage—if you’re not a strong borrower, that is.

The nation’s banking regulator (OSFI) put banks on notice today that it’s stepping up policing of their underwriting practices. Here’s OSFI’s official letter.

“Risks associated with mortgage lending practices are, in general, adequately managed by Canadian financial institutions,” OSFI’s Annik Faucher told CMT. “…However we have identified areas that require close attention by mortgage lenders, and at the same time, increased scrutiny by OSFI. As noted in the letter released today, OSFI will continue its scrutiny in the areas of income verification, non-conforming loans, debt service ratios, appraisals and loan-to-value (LTV) ratio calculations, and institutional risk appetite.”

When asked how often OSFI came across imprudent or unduly risky underwriting, Faucher said, “We would not be able to give you a specific number, but as we note in the letter, OSFI is indeed aware of a number of incidents where financial institutions have encountered misrepresentation of income and/or employment.”

Here’s more of what we’ve gathered thus far…

On why OSFI made this announcement:

  • Banks have already been under increased scrutiny since OSFI’s B-20 underwriting guideline took effect in 2012. Among other things, OSFI’s actions have resulted in stricter approval guidelines, more compliance audits, restrictions on securitized lending and more onerous capital requirements.
  • OSFI knows that the public and financial markets are growing more nervous about housing overvaluation by the day. It also probably realizes that both it and the Liberal government will be held partially accountable if any housing markets implode.
  • For these reasons, and due to its legitimate concern about overleveraging and overvaluation, OSFI wants to make a public statement that it’s doing its job of enforcing prudent risk management and protecting bank customers.

On the overall industry impact:

  • One might expect a slight drop in mortgage volumes at federally regulated lenders, other things equal, once lenders adjust to OSFI’s underwriting guidance.
  • Despite domestic lending accounting for about half of Big 6 bank profits overall, this development likely presents only a small earnings challenge.

On expected lender outcomes:110714_0511_OSFIsB21is1.jpg

  • Federally regulated lenders and lenders who source their funding from federally regulated lenders, will be impacted by this announcement.
  • Those lenders will respond in one or both of the following ways:
    • By tightening underwriting guidelines.
    • By making fewer exceptions to their underwriting policies.
  • Most provincially regulated lenders (i.e., credit unions) will not be directly impacted by this announcement when it comes to uninsured mortgages.
  • This could give certain credit unions a slight edge in low-ratio underwriting flexibility, for some period of time.
  • According to analysts we’ve spoken with, capital requirements will increase considerably on a percentage basis come November. However, the impact on an absolute basis should be small, but still large enough to trigger a slight reduction in mortgage discounting.

On how borrowers may fare:

  • Mortgage applicants, particularly foreign borrowers and self-employed applicants who don’t earn a traditional T4’d salary, should expect to be asked for more income documentation (e.g., tax documents, pay statements, bank account statements, etc.)
  • Some homeowners who can’t prove income in the traditional manner will be pushed into the arms of non-federally regulated lenders (credit unions, mortgage investment corporations and private lenders).
  • In turn, more of those borrowers will be forced to pay interest rate premiums, as federally regulated lenders have traditionally provided the lowest cost of borrowing in this market.
  • Lenders will make fewer debt-ratio exceptions. As a result, a small percentage of borrowers will see their requested loan sizes cut back.
  • In certain cases, homeowners with rental income will not be able to use as much of that income to qualify for their mortgage.
  • Lenders may no longer be able to rely on the 5-year posted qualifying rate (currently 4.74%) when measuring a borrower’s debt ratios. If this qualifying rate is raised, it will further restrict credit (maximum loan amounts) for borrowers with above-average debt loads.
  • Some lenders may start calculating and relying on more conservative lending values, as opposed to normal appraised values. This could slightly reduce the equity available to homeowners, a key consideration for those who want to refinance up to 80% of their property’s value (the current refi limit for prime mortgages).


One of the key questions remaining:

The qualification rate is currently established as the mode average of the Big 6 banks’ 5-year posted rates, as determined by the Bank of Canada. That number is presently 4.74%, about 250 basis points above the typical 5-year rate.

But OSFI isn’t satisfied with that. It says: “Relying on the prevailing posted five-year mortgage rate to test a borrower’s ability to service its obligations in a rising interest rate environment does not represent a sufficiently conservative stress test.”

If OSFI requires a higher qualification rate, that’ll make it harder for many borrowers to get a variable or 1- to 4-year fixed term. We’ve reached out to the regulator for clarity on this point and will update this story once we know.

Update — 6:09 p.m. ET:

Here’s OSFI’s response to the question on whether the qualification rate will be set higher:

Each application is unique, and the qualifying rate is something that financial institutions should look at and ask if it is appropriate as a minimum level to ensure ongoing mortgage affordability. As for future changes, as noted in the letter today, OSFI will be reviewing its Guideline B20 more broadly to ensure it is aligned with prudent industry practice and Canadian housing market realities.

Update 2 — 11:49 p.m. ET:

Here was OSFI head, Jeremy Rudin’s, response when BNN’s Andrew Bell asked if he’d increase the mortgage qualification rate:

“..We’re more inclined to reinforce [a] principles based approach..rather than pick a qualifying rate..”


Falling interest rate FBLots of brokers out there criticize rate buydowns. They argue that buydowns cause a “race to the bottom” in mortgage pricing.

If that’s how you feel as a mortgage broker, take solace. The race isn’t far from the finish line.

Online mortgage rates have already plunged to levels where some brokers now earn just 35 basis points in compensation (or less), even on five-year fixed terms. That’s one-third of what most brokers make.

At these revenue levels, only a minority of exceedingly efficient large-scale brokers will succeed long term in the deep discount market. As more independent mega-brokers sign on directly with funders (à la True North Mortgage) and/or negotiate $50-$100 million volume deals with lenders, that’ll become all the more true.

Adding to this trend is the virtual certainty that more lenders will launch DTC (direct-to-consumer) call-centre models and sidestep originator commissions. And, of course, our major banks won’t be left behind. CIBC has already flashed a glimpse of the future by negotiating rates on borrowers’ smartphones and bypassing traditional mortgage specialists.

Thus far, the rest of the broker industry (those without deep discount models) seems largely unfazed by these developments. Canada’s top mortgage agents— the 20% that do 80% of the volume—have profitable existing books of business and established referral sources. In their view, they can sufficiently sell their value to clients. Moreover, their volume has yet to take a serious hit.

Then we have the lean-minded so-called “order takers.” These are online shops willing to work for 35 bps. These are the guys who have started to move the market for all brokers—regardless of experience, referral sources, salesmanship, advertising, value propositions or what have you.

I increasingly hear from $200- and $300-million producers who are losing deals over 5-basis-point rate differences. This is something that rarely happened to them in the past, but it’s occurring with more regularity today.

As time goes on, brokers will hurry to find solutions to this problem when, in fact, one key solution is the same as it always was: dollarization.

In industry terms, dollarization is the practice of articulating the value (in dollars) that customers receive from your advice and assistance. It’s an effective strategy given the commoditization dilemma, but it’s not easy to execute. 

The question you’re trying to answer as a broker is: What is it worth to someone, monetarily, if I find them the optimal mortgage?

“Optimal” refers to the mortgage with the lowest cost of ownership and the best customer experience. Getting a theoretically optimized mortgage is worth something to people because it saves them time and money (interest cost, penalties, refinance rate surcharges, conversion rate surcharges, reinvestment fees, discharge fees, etc.).

But here’s the rub. Identifying the lowest cost of borrowing for a particular client takes serious work and analysis. It entails something like this:

  • asking the right interview questions upfront
  • understanding a client’s five-year plan
  • calculating the probability of certain life events occurring in that timeframe
  • objectively comparing features and restrictions for several mortgages
  • mathematically ranking which mortgage (or series of mortgage terms) are the best value over five years
  • explaining that to consumers in a way they understand (and believe), with hard numbers to back it up, and
  • ensuring the customer doesn’t take that knowledge and go elsewhere.

Note: We focus on five-year time horizons because: a) mortgage terms over five years are not cost effective at today’s rates, and b) predicting the future beyond five years approaches futility.

In an era where online rates are often 20+ basis points below median broker rates, failure to optimize people’s financing and dollarize that service may become a death warrant. It boosts the odds that customers evaluate you on price, and price alone. And that’s a bad outcome for the more than 95% of brokers who don’t/won’t have the buying power and side deals to compete on rate.

When the “race to the bottom” is officially over, those who prosper against the Walmarts of the mortgage industry will be the professionals who can persuasively explain why their higher rates are not just padded profits. Many quality full-service brokers believe that their service to prime borrowers is worth an extra 20+ bps. In most cases, it’s not. But it’s not worth just 1-2 bps either, and effective dollarization can get that across to folks.


Report Review FBMortgage Professionals Canada released its spring report on mortgages and housing this week. More so than in previous reports, this one was opinion-heavy on the overall affordability and sustainability of housing.

MPC’s Chief Economist Will Dunning has long held that mortgage rule tightening could trip up the economy, noting that “…the greatest risk to the housing market (and consequently to the broader economy) is not reckless consumers or lenders – it is needless policy changes.”

That position has been well covered by the media so we won’t belabour it here. Instead, here are four other quotes that deserve attention — this author’s feedback is in italics.


  • “Our review of housing market data convinces us that changes in housing prices are fully respective of interest rates.”
    • Affordability is a forceful lever and falling mortgage rates have been the fulcrum for that lever. Nonetheless, home prices also hinge on things like shortages of detached homes (in certain major metros), urbanization, income/jobs gains, natural population growth and immigration. Prices will continue reacting to these factors regardless of modest rate changes and policy tweaks.
  • “…a few senior executives in the financial services sector claim to see increased risk and are calling for tighter lending criteria. We would be interested in seeing the supporting data.”
    • Everyone should join in agreement on this one. Using a public podium to advocate housing changes (with potentially significant economic impacts) should obligate one to support that advocacy with hard data. 
    • Dunning goes on to say: “Mortgage lenders who are concerned about current risk-taking could very easily and very usefully add to the discussions by publishing data from their own businesses, especially with regard to Gross Debt Service Ratios and Total Debt Service (TDS) Ratios.”
    • Plotting debt service ratios over time is vital for housing risk analysis because it tracks how capable people are of making their payments. It’s especially telling if you know how many people have high debt ratios. Industry resources like CMHC and OSFI have had aggregate TDS data like this for ages but refuse to make it publicly available.
  • Will Dunning“The gap between posted versus actual rates has gotten increasingly large over time, and that change has implications for the reliability of any analysis that uses posted rates.”
    • Dunning is correct here as well. Few useful conclusions can be derived from posted mortgage rates, since almost nobody pays them. The Bank of Canada has ample discounted mortgage rate data but declines to make it publicly available. That’s a disservice to housing analysts across the country. Hopefully Mr. Dunning makes his discounted rate data available as well.
  • “At today’s typical mortgage interest rate (2.5%), and assuming an amortization period of 25 years: for the first payment, more than half (53%) is repayment of principal or forced savings.”
    • This “guaranteed savings plan” is one reason why, each and every day, more people view home ownership as their retirement saviour. Over one-third of Canadians expected to rely on home equity to fund their old age, according to Scotiabank in 2012. With inadequate savings and meagre investment returns, that number has likely grown, and will continue to grow. Ottawa best take care to balance its desire to slow and de-risk housing with preserving this critical retirement safety net for millions of Canadians.

First quarter 2016 was one of the most unexpected quarters in memory for broker channel market share.

If you had to sum it up in one sentence: the largest players ceded a fat slice of the pie to smaller lenders.

In fact, the top five broker lenders combined posted their lowest market share reading since we began tracking this data six years ago.



Brexit FBWhat a day in the markets. Britain surprised the world and walked out on the European Union.

In response, markets crashed around the globe—sovereign bonds aside.

Here’s a quick rundown of the Canadian implications…

It’s Not the End for the UK/EU

UK’s parliament must still vote to exit the union, albeit that’s expected to be a formality. Britain must then remain in the EU for two more years, and it’s not impossible for the country to change its mind in that time. Barring that, there’s the possibility that the EU and UK negotiate an alternative trade deal. After all, roughly half of UK trade is with the European bloc.

More Accommodative Central Banks

The UK’s Treasury expects its GDP to be a whopping 3.6% lower in two years. Economic fallout and uncertainty (including uncertainty about who might leave the EU next) will curb foreign investment and slow monetary tightening worldwide. That includes in the U.S. where rate hikes are now improbable for much longer. At the very least, “This dramatically lowers the probability of a hike this year,” said TD earlier.

Canada’s Bonds More Appealing

A more dovish Fed, the downgrade in Britain’s credit rating and economic aftershocks all give Canadian bond yields more leash to run—lower, that is.

But mortgage rates are likely not about to fall off a cliff near-term. Canada’s inflation outlook will be more greatly impacted by things like negative sentiment and falling oil than any deterioration of UK trade. And those rate drivers could take time to play out.

As for specific numbers, “The economic ramifications for Canada are challenging to estimate,” says Bank of America Merrill Lynch, “…For now we have trimmed 2017 GDP growth by 0.2 percentage points to 1.7%.”

Mortgage Rate Path Altered Slightly

There’s a possibility we could see higher risk/liquidity premiums built into mortgage rates, especially variable rates. But make no mistake, there’s nothing long-term bullish for rates in this news.

For us to see any material fixed rate cuts, the 5-year yield will need to drop closer to its all-time low of 0.40%, or below.

As for the prime rate, Brexit talk will surely inspire more economists to push rate-hike projections into 2018. At the moment, OIS prices imply a 1 in 3 chance we’ll see a BoC cut this year.

More Fuel for Canadian Real Estate?

UK instability could boost international demand for Canadian housing, believes Mortgage Professionals Canada CEO Paul Taylor. “…The uncertainty it causes in the European marketplace now only exacerbates the Toronto and Vancouver foreign investment elements of the overheating housing market.”

A cheaper loonie could add even more fuel to that fire.

“Hopefully policy-makers will move quickly to address this issue and not delay for the full StatsCan study to be completed,” he says. “I fear at that point it may be too late.”

Broker Share

Source: CMHC

CMHC pinpointed some encouraging trends for brokers in its recently released 2016 Mortgage Consumer Survey (MCS).

Among other gains, brokers boosted their market share noticeably among renewers and refinancers. Part of those gains are thanks to increasingly informed consumers. In other words, folks are becoming less likely to merely accept lender renewal offers at face value.

But CMHC’s report wasn’t all rosy for brokers. For one thing, they lost four points of share among their core first-time buyer segment. That’s a number we’ll be keeping very close tabs on in upcoming Mortgage Professionals Canada and CMHC data.

Below are 10 other MCS stats that matter, in no particular order…


  1. Lender loyalty is dropping — 81% of those renewing remained loyal to their lender, down from 86% in 2015; 73% of repeat buyers stayed with their lender, down from 77% in 2015. The main reason people switched mortgage providers, says CMHC, was to get a better interest rate.
  2. Brokers seized more renewal business — 26% of those renewing used the services of a mortgage broker, versus 21% in 2015.
  3. Brokers won more refinance business — 38% of those refinancing used the services of a mortgage broker, versus 33% in 2015.
  4. Renewals spell opportunity — In the past year mortgages were split three ways as follows: 62% renewals, 18% refinances and 20% purchases. Brokers and bankers alike are working harder than ever to woo renewers. Expect lenders to make earlier renewal offers at better rates to counter this trend.
  5. First-time buyers still vital — Of the 20% of mortgages that were for purchases, the majority (11%) were first-time buyers and 9% were repeat buyers. Young buyers are most concerned by unforeseen closing costs and overpaying for a home, says CMHC. These are two areas where sound professional guidance creates loyalty.
  6. 2016 CMHC Mortgage Consumer SurveyRate site traffic surges — 44% of those researching mortgages online used a mortgage comparison website. That compares to just 16% of all mortgage consumers a few years ago, according to Mortgage Professionals Canada.
  7. Social media gains — 29% of consumers used social media to gather mortgage information (vs. 20% in 2015).
  8. Online ads work — Almost one-third (32%) of consumers said they found their broker website through online advertising. That’s about half as many as the number who are referred, but it’s growing.
  9. Satisfaction levels diverge — 83% of recent buyers were satisfied with their lender versus 77% who were satisfied with their broker. This is the first time in a while that we remember these numbers deviating materially.
  10. Quality advice pays — Providing advice on long-term mortgage strategies can lead to an 85% increase in the likelihood of new business (from consumers who recommend their mortgage professional to family and friends). Why not provide clients a personalized written mortgage plan with every mortgage? Some of the country’s most successful mortgage brokers do just that.

Survey background: CMHC’s survey was conducted online and polled 3,006 recent mortgage consumers who had undertaken a mortgage transaction in the preceding 12 months. CMHC has conducted this survey since 1999.