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2011 CMHC Mortgage Consumer Survey

2011-CMHC-Mortgage-Consumer-Survey More first-time buyers are arranging mortgages through brokers than ever before (48%). That will surprise some, given all the discounting and sales hiring going on at banks and credit unions.

That statistic and many others are in the just-released 2011 CMHC Mortgage Consumer Survey.

Among other things, the report also highlights emerging trends in online mortgage research. CMHC reports that over one in five consumers are now using the Internet as their sole source of mortgage information. That trend is still unfolding but as we’ve written before, the ratio of people who feel they can go it alone will grow—just as it’s grown in the online investing market.

Here’s a sampling of other key findings (italics ours):

Mortgage Research

  • 65%:  of all mortgage consumers use the Internet for mortgage research
  • 75%:  of home buyers use the Internet to research mortgages
      Generally speaking, home buyers do more mortgage research than renewers (who sometimes just sign their lender’s renewal letter)
  • 80%:  of first time buyers use the Internet to research mortgages
    Down from 90% in last year’s survey
  • 51%:  of recent mortgage consumers used a mortgage or financial professional to begin gathering information on their mortgage options
    49%:  started with family or friends, the Internet, or a real estate agent
  • 81%:  of recent buyers relied on a mortgage professional (a mortgage broker or lender rep) at some point for advice and consultation
  • 22%:  of borrowers relied solely on the Internet for mortgage information gathering
    CMHC’s VP Insurance and Business Development, Pierre Serre, tells us “This statistic has to do with how people do their research. These are people who didn’t bother to go into a bricks and mortar location like a branch. They just stayed online…These are people that feel that interacting with people is not the way they want to [research their mortgage].”
  • 35%:  exclusively used off-line resources to research their mortgage
  • 43%:  reported using both on-line and off-line resources

Online Tools

  • 67%:  of respondents who used online resources said they visited web sites of specific mortgage lenders
  • 1 in 2:  online consumers reported using an Internet search engine during their mortgage research
      Wow. Only half?
  • Of people using search engines to research mortgages:
  • 85%  searched for interest rates.
  • 72%  searched for mortgage options
  • 66%  searched for a mortgage calculator
  • 38%  searched for general information about mortgages

Other Online Activities

  • Among mortgage consumers who used the Internet for mortgage research:
  • 75%:  used an on-line mortgage calculator
  • 76%:  researched terms and conditions
  • 65%:  independently compared the costs of different interest rate scenarios on different amortization or payment schedules
  • 60%:  negotiated a better interest rate than the posted rate
  • 48%:  considered other mortgage offers before deciding on their mortgage
  • 11%:  of recent first time buyers used social media platforms for researching mortgages
      Up from 3% the previous year

Decision Timeframes

  • 5 weeks: the average time it took recent buyers to make a final mortgage decision
  • 7 weeks: the average time it took recent first-time buyers to make a final mortgage decision
  • 11 months:  the average time it took homebuyers to plan their purchase

Consumer Satisfaction

  • 84%:  of recent mortgagors were confident they got the best mortgage deal for their needs
  • 82%:  of recent buyers indicated that their mortgage professional—either a mortgage lender or mortgage broker—took the time to fully understand their financial situation and mortgage needs

Customer Follow-up

  • 68%:  of lender clients who received a follow-up “totally agree” they “will likely contact this lender to get advice concerning their future mortgage needs”
    vs. 45% of those who had not received follow-up contact
  • 62%:  of lender clients who had follow-up contact totally agree they “will likely recommend this mortgage lender to a family member or friend”
    vs. 39% of those who had not received follow-up contact 
  • 69%:  of broker clients who had follow-up contact totally agree they “will likely recommend this mortgage broker to a family member or friend”
    vs. 35% of those who had not received follow-up contact
  • 68%:  of broker clients who had follow-up contact totally agree “this mortgage broker took the time to fully understand their financial situation and mortgage needs”
    vs. 39% of those who had not received follow-up contact

Lenders Loyalty

  • 89%:  of renewers did not change lenders
      Up 1% from CMHC’s 2010 survey
  • 68%:  of refinancers did not change lenders
    CMHC says the lender retention rates for renewers and refinancers have remained relatively consistent over the past few years. Serre says, “Looking back at past surveys we know that people stay because of service, rate and convenience. People move for rate. That’s usually the reason if you look back over time.”
  • 57%:  of first-time buyers got their mortgage with the institution they were dealing with at the time
      This is up big from 46% last year. Just for fun, try saying the word “mortgage” to a bank teller. Faster than you can blink they’ll offer a consultation with a mortgage specialist. Almost everyone in the branch is trained and incentivized to generate mortgage business
  • 69%:  of repeat buyers did not change lenders when obtaining their most recent mortgage
      Up from 58% last year 

Mortgage broker share

  • 23%:  overall broker share of the mortgage market
      The all-time high was 24% in 2009, says CMHC. CAAMP’s data shows the record high at 26% in 2009
  • 48%:  mortgage broker share for first-time buyers
      This is a record high according to CMHC. This figure has been on a steady uptrend since 2006 when it was just 30%. With all the talk of falling broker share this is a bright spot, and one of the more notable stats in this report
  • 32%:  mortgage broker share of repeat buyers
      A whopping 54% of buyers in British Columbia used a mortgage broker
  • 25%:  mortgage broker share of refinances
  • 15%:  mortgage broker share of renewals
      If you’re wondering why broker share is only 23% overall, it’s because most mortgages are renewals. Serre says “First time buyers and repeat buyers accounted for 21% of the survey, renewers were about half the survey, and 31% of respondents had refinanced.”

Mortgage Paydown

  • 39%:  of recent buyers have their mortgage payment set higher than the minimum required
      If you get a raise or have spare cash flow, it’s so easy to bump up your mortgage payment. Just call your lender’s customer service line. Prepaying a mortgage is one of the lowest-risk methods of generating a halfway decent after-tax return
  • 20%:  of recent buyers have already made a lump sum prepayment since taking out their mortgage
  • 39%:  intend to reduce their amortization at their next mortgage renewal


  • 81%:  of mortgagors have some form of savings (RRSPs, TFSAs, non-registered investments, etc.)
  • 1 in 8:  did not have a good understanding of how much mortgage they could afford before buying
     As a rough rule of thumb, lenders prefer not to see more than 40% of your pre-tax income allocated to monthly obligations. The maximum at most lenders is 44%. Serre says, “In our step-by step guide there is a budget which we recommend people do. You really need to be able to know how much you can afford. Do your budget and then take a look at the TDS (total debt service) ratio. For certain households [the ideal maximum] could be 35%, and just because its 40% (or less) doesn’t mean you should buy a home…”Different people have different risk appetites. Above 40% we start paying a lot more attention to the application as a whole, to the borrower’s credit and ability to repay, and the property they’re buying. 44% is very high.”

Survey background: CMHC’s survey was conducted online and polled 3,512 recent mortgage consumers who were the prime decision makers. The survey took place from Feb. 25 to March 25, 2011. The survey was limited to those who have had a mortgage transaction in the preceding 12 months. CMHC has conducted this survey since 1999.

Rob McLister & Steve Huebl, CMT