Lender Market Share Gets Interesting

market-share-mortgageScotiabank is back on top as the #1 broker lender by volume.

It finished the 2nd quarter with a healthy 3.1 percentage point margin on second-place finisher, FirstLine.

That’s according to a source quoting the latest Q2 D+H lender share rankings.

Despite Scotia’s reascendance to the market share throne, its 17.7% slice of the pie is down from 20.7% in Q2 2010.

Overall, broker channel volume fell 14.8% year-over-year, which largely reflects economic and general market trends.

There were some notable stories in this quarter’s rankings. Here’s a run-through of the key players:

FirstLine:  FirstLine slipped into second place, shedding over three percentage points of market share. That’ll surprise few brokers given that:

A)  FirstLine has priced itself out of the variable rate market;

B)  Variable mortgages reportedly comprised over 60% of its volume at one point; and,

C)  Everyone today wants a variable! (Well, not “everyone,” but many more than normal, it seems.)

TD:  A big surprise is TD’s move up to third place from fourth last quarter. TD’s share rose three percentage points in the last 12 months. Many (us included) figured the odds were good that TD would slip after its controversial move to register all of its mortgages as collateral charges (which forces customers to pay higher switching costs when changing lenders). To TD’s credit, it has successfully:

1) Positioned collateral charges as beneficial—despite the customer not having a choice; and,

2) Motivated its status brokers to submit more deals.

First National:  First National dropped to fourth place but it did gain a half point of market share (compared to Q1).

MCAP:  MCAP stayed put at #5, also growing its share by a half point.

Street Capital:  Street Capital maintained its sixth spot, improving share by 9/10ths of a percentage point. Street has rarely been a rate leader but it has been widening its product options. We also hear repeatedly from brokers that Street’s underwriters work hard to get atypical deals done.

National Bank:  National Bank of Canada (NBC) captured 7/10ths of a percentage point in share and held its #7 slot. That comes after a big leap from 10th position in the prior quarter. National posted the largest surge in volume of any major bank last quarter, up 56%. It’s now knocking on Street Capital’s door for the #6 spot. NBC’s status broker rates currently lead all broker-channel banks. Its products (especially the All-in-One and Made to Measure mortgage) are just as good. Some would prefer bigger lump-sum prepayment privileges (i.e., more than 10%), but you can’t have everything.

ING Direct: ING advanced one position to #8. It has made several underwriting/product improvements in the last year. It also features a strong feature-set (i.e., 25/25 prepayments, no-haggle rates on conversions, online access, “fair” IRD penalties, across-the-board 120-day holds, etc.).The only complaint we ever hear about ING, and it’s a big one, is that its standard rates are above-market.  Stay tuned for ING’s new HELOC, which could be a big winner if it’s automatically readvanceable.

Macquarie Financial: #9. Exiting the channel. Buh-bye.

Merix Financial: Merix rounds out the top 10 with a 91% volume gain over Q1. It’s been strongly competitive on 5-year rates as of late, and may pick up share next quarter with Macquarie hitting the highway.


Other movers…

Equitable Trust:  Soared from 18th to 13th place, with a 136% volume gain year-over-year. “B” lending is back with a vengence.

Coast Capital:  Coast is one of the most-popular credit unions in the country. It leaped from 17th to 14th year-over-year, and it only does BC deals! It may see slower growth in Q3, however, as several lenders have been beating it on rate. Coast had a good run there, leading the Vancouver rate market for months.

AGF Trust:  While a tiny player overall (with just 0.3% market share), AGF’s volume exploded 310% in the last year. That’s due largely to its partnership with Verico.

Rob McLister, CMT

  1. Hi Rob,
    I wonder if adding the MorWEB numbers to the mix would provide a clearer picture of Broker market/lender share?

  2. @Bob, MorWEB does what? Maybe 5% of volume? They are almost irrelevant.
    @Chris, A few brokers buy down ING rates so maybe you’ve found one of them. In general, ING’s rates are absolutely not the “best rates around.”

  3. They don’t have the best rates around but they did have a great variable rate mortgage for a while. I got in when it was prime – 0.90% so it’s been a great ride thus far. However, their conversion offer is not exactly a great feature.. they allow you to convert to their posted rate which is probably a bit over their discounted rate. I suppose it’s a nice ‘safety’ net if ever you need it but it’s more of a selling feature for them and it’s unlikely to really be a benefit to any consumer once in they are in the mortgage.

  4. Keep in mind with ING’s variable, your rate will be adjusted 90 days after a change to prime. when rates do start to increase, it will be a bonus, since you’ll have an extra 90 days at the lower interest rate compared to all the other institutions.
    Even if you have prime – .85 with ING and someone else is at prime -.90, you may be better off with a higher rate depending on your mortgage size.
    This idea can relate to a previous post about looking at the total cost of borrowing as opposed to just the interest rate.

  5. Steve: So is prime drops which might be the case in the near future, I am thinking the 90 day delay is no so good.

  6. Rob,
    This is great. Thanks. Should a CMT quarterly feature. A lot of us can’t get the D+H lender report.

  7. Rob,
    “Overall, broker channel volume fell 14.8% year-over-year, which largely reflects economic and general market trends…”
    Interesting,considering this is a significant drop,what other market trends are you referring to? Maybe the big bad banks?

  8. I am not going to debate market share, as don’t have a clue as to MorWEB’s market share as it relates to the total $ volume of mtgs being generated. I suspect their market share is larger than 5% (as they are profitable) and they are in-fact a reliable and relevant Service provider and have some high $ volume Firms quietly using Morweb (us being one of them) As an aside, if you are basing your 5% estimate on information sourced from D&H, I would be Leary of that estimate… Especially when the same people say they have upwards of 99% market share of a gazillion broker/agents (who may or may not be active writing deals) and remember, the same people have been telling us that MorWEB would be out of business within a year, especially with the exclusivity agreements in place.
    With MorWEB’s entry into the market place some 5 or 6yrs ago, we have competition and (if we are quite), we also have a choice of which Service provider to use thus opening up recruitment to those on alternate origination systems. All this came out of a market share comment? Have a great weekend and I love the Blog to voice my opinions now and again…
    Keep up the great work Rob

  9. Please I would love to see what you are getting that is so much better? I”m not bragging but saying not many people are beating 2.15 these days and am quite content with ING. Lumps sum payments, 90 rate hold, etc.
    Please I implore some examples from you of people that have much better rates that are in the business…..

  10. Yes that is a great feature but as Mike said below it could work against you. I don’t know for certain it works that way going down as well.

  11. Arby, Q2 2010 was a better mortgage market in general. Non-seasonally adjusted home sales, for example, were down 14.7% in April 2011 Y/Y. We also hear there may be a bit more share loss in the broker channel–which would be a continuation of a prior trend.

  12. Is the lower 14.8% broker volume reflective of the market??…I think not..and if not, that is the most compelling number we should be taking note of..monolines, brokers and our CAAMP and IMBA organizations…what are we doing to make our channel, the channel of choice for consumers??.egs. serious market positioning marketing, serious licensing and monitoring of agents, serious customer experience enhancements to process, product and service. the market opportunty is there, a strong demand for professional expert advice and a comfortable smooth experience. we need to work better together to seize the opportunty and overcome the imherent challenges of our channel.

  13. RBC does not deal with outside brokers, they have their own internal brokerage called AMS.
    Scotia and TD deal with outside brokerages.

  14. That’s their alternative mortgage solutions division. The way it works is if an RBC client doesn’t qualify for a conventional mortgage with the bank, they’re sent to AMS. Interestingly enough, the people who work there are not brokers but actually work for the bank. Therefore, it’s not really a brokerage even though they work with other lenders.

  15. How do they get away with that? are the other lenders owned by RBC? You would think FICOM would have a field day with that…

  16. Carlo
    If home sales are down almost 15% how can that not affect the broker market? It affects the entire mortgage industry.

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