Lender Market Share Surprises


It’s tough being a small lender in a scale business like mortgages. Davis + Henderson’s latest market share report reflects that.

The top 10 lenders are increasingly dominating the mortgage broker channel. Their share of the pie has climbed for at least three consecutive quarters and now stands at a lofty 84% (up from just under 80% in Q4).

Broker volume has also grown. Mortgage brokers funded 10% more volume in Q3 compared to the same quarter last year.

The mortgage market is clearly alive and well despite all those dreary housing forecasts last fall. (Ultra low rates will do that for you…)

In the text that follows, we run down the notable lender performances this past quarter. These figures are unconfirmed but come from sources we believe to be reliable.

The Big 3

1)  Scotiabank
17.7% market share, +1.5 ppsYOY
Scotia’s got a winning model that includes respectable rates, a broad product line, and business relationship managers (BRMs) that are sales, support and underwriter all in one (brokers love a single point of accountability). Scotia’s BRMs are also highly incentivized to service their brokers efficiently and drive volume.

2)  First National
14.0% market share, +1.4 pps YOY
First National has stealthily moved into 2nd spot. That’s a beautiful thing. Why? Because First Nat serves all brokers, not just “status” brokers. This benefits the broker industry as a whole and is obviously positive for market share. It is also not by accident that First National’s service is ranked best in the business.

3)  TD Bank
12.2% share, +1.7 pps YOY
This will surprise many, given the vocally negative feedback on TD’s collateral charge mortgages. TD has obviously been successful in selling collateral charges as a “feature” and incentivizing its biggest brokers to push volume. As much as we dislike collateral charges being forced on consumers, from a purely business standpoint, TD management deserves respect for what they’ve accomplished.

The Balance of the Top 10

4)  FirstLine
We can’t remember the last time that FirstLine, a subsidiary of CIBC, was in 4th place. It’s a staggering fall from a #1 ranking just six months ago. CIBC’s decision to stop competing aggressively on broker rates has cost FirstLine goodwill among brokers, discouraged application submissions, and forced some brokers to abandon their hard-earned “Gold” or “Platinum” status. We miss the FirstLine of old. Something’s got to give…soon.

5)  MCAP
CMP’s top-ranked lender is holding in 5th place. No drama here.

6)  National Bank
Canada’s scrappy #6 bank posted a huge 123% quarterly volume increase YOY. NBC continues to have the best combination of rates, products and status program in the channel. It also has management that knows what brokers need to compete. As fulfillment and servicing kinks get worked out, it could easily move into 5th place. If turnaround times approach the likes of First National and MCAP, NBC could even make a run for the top four.

7)  Street Capital
Despite slipping into 7th place, Street had a respectable 1.2 pps pickup in market share. More on Street Capital.

8)  Home Trust
Home makes its debut on the list at #8. It’s largely a non-prime lender and from what we understand, it wasn’t counted in prior market share reports.

9)  ING Direct
ING slipped to 9th spot after falling behind in the rate market for most of this year. Nonetheless, it did pick up 0.3 pp of share. ING has outstanding product features, employees and culture. We’ve always said that. But rates matter. The average broker can’t sell product, brand and service alone. Not in the Internet age. That aside, ING’s much anticipated HELOC will likely support its market share…whenever it’s eventually released.

10)  Merix Financial
Merix held steady in 10th place. It’s got good rates, great broker feedback, and a fantastic team behind it, but it just can’t seem to gain traction despite its unique trailer fee model—or maybe because of it? (Some brokers prefer normal up-front finders fees.) Merix could also use some product diversity, including a good variable, HELOC, equity program and/or a well-priced 1- or 2-year…or more 3- and 4-year fixed promos.

Other Notable Movers

  • Equitable Trust
    It’s 328% quarterly volume gain (YOY) is tops in the survey.
  • Coast Capital
    Coast, operating out of Vancouver, has been one of the most aggressive credit unions in the country, which explains its 208% quarterly volume gain YOY.
    If you’re a top-tier broker, ICICI has been among the best priced lenders for 5-year fixed and variable terms. It put up a 131% quarterly volume gain YOY, but like Coast Capital, that’s coming off of a very small volume base.


Source: D+H puts out an excellent report called Lender Insights which compiles lender market share data in the mortgage broker industry. We receive data from that report via 3rd party sources and have quoted it here.

Rob McLister, CMT

  1. Good luck with that. I work with more than 20 lenders. At any given time one or more will have better rates than RBC. For example, I can offer my brokerage clients prime – .4% on a variable right now. RBC won’t match that no matter what “pressure” you try to apply. Banks work for shareholders, not customers.

  2. Seriously. What is Firstline thinking? They have some of the worst rates in the market, they’re closing underwriting centres and they’re pissing off all their brokers. I know some Firstline brokers who are furious that they have to use their basisPOINTS to buy down rates and keep platinum status. Maybe that is Firstline’s plan, to get brokers to use their banked points. But why would they do that?? Are they leaving the broker market? Whatever the case, CIBC is killing the goose that laid its golden egg.

  3. JD – I’m working with a mortgage broker and she is telling me prime – 0.2% as best :-(.
    Could you help me to get get prime -0.4%?

  4. Banks can give you sometimes best rate on the market. It just depends of few factors.
    My point was not to advise not to use brokers, but to mention that for whoever knows how to bargain with a bank for a better rate, they can use broker’s rates as a starting point.
    btw, I got with a bank a .1% lower rate than anywhere in the market at the time.

  5. (P-.30%) Full approvals. Rate holds up to 120 days
    (P-.40%, 3 year) Ontario, Halifax and Winnipeg only. Full approvals and pre- approvals – 60 day rate hold

  6. Or you can use a banks’s rates as a starting point to get a better deal with a broker. At least that way you get advice from an independent professional instead of dealing with a glorified bank teller who won’t be around when you renew.

  7. Rates rates rates. Wow, think of how big our market share would be as mortgage professionals if the majority of us focused on providing exceptional service and real solutions to people like Raj, instead of helping/enabling him to chase down the best rate. FirstLine’s exit from the top spot was clearly due to their leaving the VRM market. Their fixed rates are in line with the top lenders if you are platinum and what other lenders out there will re pay you on an existing Firstline deal if you just fund 10K more? no i do not work for Firstline, i have used them extensively over the years and i am frustrated with their VRM pricing but everyone’s sucks. Our jobs should be about providing real solutions to our clients so the 0.10% difference in rates is irrelevant.

  8. Joe,
    Why can’t you provide real solutions to the Rajs of the world AND provide great rates?
    I don’t think we can downplay the importance of low rates in today’s market. Consumers can find the best rate online in seconds. You might be able to convince your clients that 0.1% is inconsequential but that won’t always be the case. I think people will increasingly focus on rates and start questioning brokers who surcharge that 0.1%.
    You may have a good answer as to why you upsell. I don’t know. All I know is that brokers who aren’t super cometitive on rates will have an uphill battle as time goes on. I’m just glad I work at the bank I do.

  9. All institutions can offer the same rates! It’s all about who’s willing to do the work and get that rate for the client. Also, RBC can offer same rates as anybody in the business. The only reason why they ‘seem’ to have higher rates, is because demand for their product is greater, driving the price higher (Supply/Demand does play a role). Brokers offer low mortgage rates, but i’m not sure how they differ from Mortgage Reps from banks. A Mortgage Rep will offer the same service, rate, and guarantees a face to face after service. Sure brokers can send you to banks, but rarely are the rates better or worse than what the Mortgage Rep at that very instiution can offer.

  10. Mortgage Reps at banks are paid 100% commission, so they will go out of their way for clients. Banks work for shareholders? Who does MCAP work for? Who does First National work for? Every company works for shareholders. RBC can offer RBCprime -0.50 on the Variable/Closed rate. Can you please explain to me how RBC has the largest mortgage portfolio in Canada (over $200 billion)? Do you think everyone overpays to deal with RBC? You’re fooling yourself! RBC can compete with any bank/broker on any given day. I don’t think brokers are inferior, i welcome them because they create competition…and i’m aware of what they can do. Do not underestimate RBC or any of the big 5!

  11. Nothing personal Joe but Firstline has THE worst variable rates I know of. Prime + 15%?? Are you kidding me? Is Firstline trying to say it can’t make money at prime – 20 like everyone else? That is a load of horse biscuits.
    As for fixed rates, 3.59% for five years is “in line”? I can list a dozen lenders who are least 15-20 bps better. Why should anyone send $25 million to Firstline to pay 15-20 bps more and not get the client back at renewal???
    Sure it’s great to be paid again on a 10k increase but how can any broker in good conscience recommend a pricier lender because they pay more compensation on a refinance?
    Again, I don’t mean to pick on you. I just can’t understand what is going on in the heads of CIBC’s management.

  12. I couldn’t care less about the service. All I care about is rates and conditions. And I am not alone. So – wake up Joe !

  13. Very good points and you’re absolutely right about the competition part. The mortgage market in Canada is worth $1 trillion so there’s plenty of room for many quality advisers to earn some good money whether they’re independent or working for a financial institution.
    But it’s important to differentiate between “can” provide a competitive rate and “will” provide a competitive rate.
    Most brokers will provide fully discounted pricing because the lenders they work with market discounted rates. For example, the odds of a well-qualified consumer getting a pre-approval from a broker at posted rate is very small. However, I have seen plenty of renewal offers and pre-approvals at posted rates from banks. And all the individuals were highly qualified in terms of income and creditworthiness.
    So as far as pricing goes, this is a major differentiating factor between the two channels. Most banks *can* provide very competitive rates but would rather not as it directly erodes their earnings. This is what that Bank of Canada paper refers to as “search costs” in terms of how this strategy affects consumers; those who don’t spend the time to familiarize themselves with what’s available in the marketplace (in essence, limiting their search costs) would often get the higher price when working with a single institution. But when the same consumer works with a broker, they will get fully discounted pricing even if they never searched for mortgage rates beforehand. That’s a very important difference.
    One particular client recently referred from a financial planner had 2 offers from the same institution. One was from the branch and the other from a mortgage rep. While I understand from a profit perspective why the banks would have the client run around to get the best pricing, from a consumer perspective I never understood why people are willing to dance to the tune of one lender. I mean, if my branch offered me a mortgage, and then I find out I can get a better price simply by going to a mortgage specialist who works the same bank, I would be just livid as to why I wasn’t offered the best rate in the first place considering it’s the same bank!
    But you’re right about pricing, banks these days can easily match the rates offered by brokers. You just have to go to the right person.

  14. But the same can be said for all sales. Ever heard of Huthwaite? I suggest you read some of their research and see their take on this whole price-driven sales approach.
    There’s no doubt that over the past decade buyers in many different sectors have become price sensitive simply because of how easily it has become to compare and search for the best price. But there are many salespeople who are thriving despite not always having the lowest price. Why is that?
    If you can find the answer to that question then you’ll realize that working for a bank in this business may be more limiting than liberating.

  15. It’s people like you, who are solely focused on rates and conditions, that end up taking the full 30 years to pay off your mortgage and, as a result, pay tens of thousands of dollars in extra interest… because you could care less about the service. I’m sure the service that Joe provides his clients (much like the service of many other mortgage brokers out there) result in them paying off their mortgage many years sooner and end up saving thousands in interest, because of Joe’s strategies and service that you have brushed off with such ease.

  16. you’re so wrong :) Assumptions about clients without even knowing them is a sign how bad you’re positioned to do business.

  17. A little info for Joe and Jeff :
    “The majority of Canadians surveyed by RBC said they expected interest rates will remain steady over the next six to 12 months.
    A low interest rate is the most important feature for 96 per cent of Canadians when choosing a mortgage, the report said.”

  18. Thank you for proving my point that there is a lack of educating and teaching going on in the majority of mortgage transactions.
    This was never a debate about “low” vs “high” interest rates. I’m sure the interest rates that Joe provides his clients aren’t “high” interest rates at all.
    My point was that even if RBC had a .1% lower interest rate than what Joe was providing, my money would be on Joe’s client paying off their mortgage faster than the RBC client.
    The majority of Canadians walking in to RBC would definitely say that the lowest interest rate is the most important thing to them. And my bet is that this is because RBC does not educate them the way Joe does on how to pay off their mortgage sooner. Why would they do that when it would take away from their profits?
    In my opinion, educating is the most important thing for any Canadian mortgage consumer. Remember, I am referring to the majority here. There absolutely are people out there who manage their debt well on their own and take advantage of pre-payment privileges, you may be one of them. But I assure you, you are in the minority.

  19. Jeff, now here I agree with you : ” There absolutely are people out there who manage their debt well on their own and take advantage of pre-payment privileges, you may be one of them. But I assure you, you are in the minority.”
    I agree that you may explain to the potential homebuyer how they can pay off their mortgage faster. It’s another story if that’s their goal in life.
    I have plenty of friends that wasted their low interest mortgage time to pay off principal faster as they spent their money on vacations and cars, instead of topping up their mortgage payments.
    And I’m sure whoever your clients are most of them will fast forget your sincere advice how to pay off faster. Unless they are subscribing for more of your services and they need someone to control their financial discipline.
    So my point is that for most people interest rate is most important. Not that the advice it isn’t.
    I personally don’t need any advice :).
    Started my last mortgage on 40 years term 5 years ago, now I have 8 years remaining which I will pay in less than 5. This may explain to you why I couldn’t care less personally about any advice. I care about the rate ;)
    Cheers !

  20. Hey BrokerX,
    If you re-read the first points I made i said i was upset with their VRM pricing and that i have access to platinum pricing so again their rates are not far off. 5 year fixed platinum at 3.49%.

  21. Hi Observer,
    I am awake, but more importantly i am awake enough to know that people quickly forget about rates but good service and real solutions creates happy clients and referrals down the road. Even more important for my clients if i have to I always win the rate war. It is always obvious to some mortgage brokers when people are shopping for rates and that is fine. The cool part about the service I offer is that it is free and people are under no obligation to use me for their mortgage. So yes Observer you can contact me and i will show you how you can save thousands off of your mortgage even if i never got paid a cent on it. It is just the right way to do business.

  22. ‘Ironic isn’t it’ said in reply to Observer
    Sounds to me like you essentially became your own mortgage broker. It also sounds like you were successful insofar as your client is feeling smug about his rate and his strategy. You used other’s rates to get yourself something better at RBC. You obviuosly read a lot and came up with a strategy that will save you tons of money in the long run. Why would you suggest that a Broker who performs that service for their client is unneccessary? Especially when it s free for the Client and convenient?I guarantee your RBC is having the largest laugh and that you were not under the rest of the market..
    Funny that you would have the opinion that most peole only need a good rate when you clearly have benefitted by shopping the market and employing a plan. RBC loves people like you.

  23. Hi Bankguy,
    I would never surcharge a rate, nor provide one to get paid more, that to me would be as bad as just selling the lowest rates and not providing any solutions or strategies to my clients.
    Honestly i do not care how much i get paid on a deal, it is always about what is best for my clients. I show them my rate sheets, then explain my programs and guide them with their choices. If my clients leave my office unhappy, especially thinking they were surcharged, do you think i would ever get a referral from them? not a chance. Bankguy, there are a lot of us out here in the broker world that take our careers seriously, they are not just jobs to us. With that said, back to clients.

  24. Hi Laura. In my opinions I always say “I” or “for me”.
    You accuse me of something that I didn’t say : “Why would you suggest that a Broker who performs that service for their client is unneccessary? ”
    So my answer to you is : I have never said that. I speak about my case, and yes, I am an exception when we speak about ability to manage my own finances and debt levels.
    And here you prove to me that something’s wrong : “I guarantee your RBC is having the largest laugh and that you were not under the rest of the market..”
    In my case I have the best market rate with the conditions that come with it and match my financial needs. So not sure how satisfied you are trying to impose to someone that the bank is laughing at them because they got “the impossible lower rate” from the bank ?
    Mortgage brokers are very helpful, but no one can help a customer more than his own wisdom.

  25. Bankguy, are you saying that the bank you work at ALWAYS beats the market? You’ve never had to sell against a competitors rate/product that has a lower rate?

  26. The reality is at any given point someone out there will always have a lower rate than others so it’s difficult for anyone to gauge whether they are actually receiving the absolute lowest rate. It’s impossible for consumers to know because they don’t have access to this kind of information. Yes, there are numerous websites that advertise rates by certain brokerages but the audience shouldn’t assume that those rates really are the most competitive ones out there. What’s more, and I believe it’s a very important point for consumers who rely on these websites to comparison shop, there’s no way to know whether that term or prepayment or conversion policy is really right for them because many consumers never actually sit down and think about these options and how they apply or potentially affect them [Observer perhaps you’re an exception ;) ].
    Statistics prove that many consumers continue to make poor decisions not with the rate (although you’d be surprised how many people out there still fall for posted and special offer rates) but with the kind of mortgage they get. Here are some industry facts directly from the lenders: 70% of consumers who take a 5-year fixed mortgage, by far the most popular fixed rate mortgage in Canada, collapse their mortgage after about 3 1/2 years. So my question is, if people are taking the time to comparison shop the rate, why choose a 5-year term to begin with? The answer is because when they focus on one aspect and one aspect alone, it distracts from them aspects. They think they’re getting the right product because the price is tempting but at the end of the day, is that product really right them? That’s something that no website can do. In this case, the consumer who focuses on the rate may have gotten a very good rate indeed. But now all the savings from that wonderful rate would be eroded because if they happen to be part of the statistics, and with 7 out of 10 making the same mistake the odds are very good that they will be, they have to either pay a penalty or do a blend where they never receive the lender’s lowest discounted rate.
    I agree that the consumer’s own wisdom is the best tool to making an informed decision. It’s a fact that consumers who educate themselves about their options and take the time to understand their mortgage and have established a repayment plan, these consumers would be at a far better position to negotiate the best price than those who just blindly trust what their banker or broker is telling them without understanding why they’re even being put in this product to begin with. But at the same time it’s important for consumers to understand that the information that’s available out there doesn’t address other components that are as equally important as competitive rates. This is where the human element comes in quite handy, in my opinion.

  27. Rob,
    Where do these top # 10 fall in relation to the “Big 5” banks for new mortgage volume? Obviously, if this just the broker channel, there’s got to be lots more mortgages in the non-broker channels. I realize the “Big 5” will always hold more mortgages than the non-bank lenders but in terms of growth, what percentage of all new mortgages does the broker channel make up and of the non-broker channel, how do the lenders rank?
    Any chance you think some of the non-bank lenders like First National might launch their own internal sales force and allow customers to go through them directly?

  28. Hi Doug,
    27% of mortgages were obtained in the broker channel in the last 12 months, per CAAMP data.
    The Big 5 banks take up 3 spots in the top 4 (since FirstLine is part of CIBC).
    I have no doubt that at some point one or more broker-centric lenders will open direct-to-consumer channels. It will tick off some brokers when it happens, and it may take a while, but thin margins will eventually demand it.

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