2012 CMHC Mortgage Consumer Survey

CoupleIn the past year, more people have been:

  • researching mortgages online
  • using mortgage brokers, and
  • making extra mortgage payments.

Those are some key findings from this year’s CMHC Mortgage Consumer Survey.

This always-intriguing report also highlights continuing trends in online interaction, particularly:

  • the emergence of social media as a tool used by mortgage consumers, and
  • growth in do-it-yourself mortgage research.

Here’s a sampling of important findings (italics ours; key data highlighted):

Mortgage Research

71%: of consumers researched mortgages online, up from 65% in 2011. (Somewhere down the line we’ll see this number in the 90% range.)

31%: relied solely on the Internet to gather mortgage-related information. (This is up from 22% last year, and further indication that consumers are increasingly taking mortgage research into their own hands.)

86%: of those researching mortgages online search for interest rates. (Rates are the #1 mortgage research topic. No surprise.)

61%: of buyers reported receiving explanations about the impact of mortgage prepayments and the effect of rising interest rates during their information and mortgage selection process. (Every mortgage professional in the country should be testing clients’ tolerance for rates that are 200-300 basis points higher.)

Online tools

71%: of consumers who went online used a mortgage calculator.

20%: of first-time buyers used social media (up from just 3% in 2010).

43%: of social media users used the interactive nature of social media either to solicit opinions or to provide answers to other mortgage consumers.

Mortgage broker share

27%: of mortgage consumers used a mortgage broker to arrange their mortgage in 2012, vs. 23% in 2011. (This is a record high according to CMHC. Key reasons for using a broker continue to be “getting the best rate or deal” and “receiving excellent service,” say CMHC.)

1 in 5: mortgage renewers relied on a mortgage broker (up notably from last year’s 15%).

Broker share of mortgage originations:

  • 48%: among first-time buyers (Almost half of young buyers are choosing brokers, versus 35% five years ago. That’s despite brokers’ marketing budgets being microscopic compared to the banks.)
  • 32%: among repeat buyers
  • 27%: among those refinancing.


29%: of buyers reported receiving a recommendation to use a specific lender.

25%: of buyers reported receiving a recommendation to use a mortgage broker.

The most common referral source for lenders was a family member or financial planner. In the case of brokers, it was a real estate agent or a friend of the borrower.

Decision Timeframe

5 weeks: the average time mortgage consumers spend doing research before making a mortgage productdecision. First-time buyers spend an average of eightweeks.


Of those using a lender:

  • 68%: conducted their mortgage negotiations in face-to-face meetings
  • 18% carried out those negotiations over the phone.

Of those using a broker:

  • 51%: conducted their mortgage negotiations in face-to-face meetings
  • 21% carried out those negotiations over the phone. (It’s likely that the convenience of remote mortgage transactions will overtake face-to-face meetings as time goes on. Countless brokers – and even some lenders – use remote models today. The ones we know all report good success, despite there being a learning curve to creating relationships “over wires”.)

Customer Follow-up

46%: of consumers were contacted by their mortgage professional after their mortgage closed. (42% for those using a lender directly vs. 55% for those using a broker.)

Consumer Satisfaction

83%: of those using the services of a lender said they were satisfied with their experience.

77%: of those using the services of a broker said they were satisfied with their experience.

2 out of 3: consumers contacted after closing by their mortgage adviser “totally agreed” that they were satisfied with their services (versus about 4 in 10 among those who had not been contacted).

60%: of consumers contacted after closing said they “totally agreed” they would use their lender or broker again in the future (versus about one-third of those who were not contacted).

Loyalty to Lenders

88%: of renewers continue to remain loyal to their existing lender. (This hasn’t changed much since 2009. Lenders continue to do everything they can to retain clients at renewal.)

59%: of first-time buyers reported getting their mortgage with the financial institution (FI) they were dealing with the most, vs. 47% in 2009. (This is a significant increase. FIs know the value of a young buyer and are being aggressive in courting their existing young customers.)

As with brokers, key reasons for using a lender continue to be getting the best rate or deal, and receiving excellent service.

2.7: the average number of lenders that recent buyers contacted in order to learn about mortgage options. (Includes only consumers who contacted lenders. Not all did.)

1.9: the average number of brokers that recent buyers contacted in order to learn about mortgage options. (Includes only consumers who contacted brokers. Not all did.) 

First-time consumers

34: the average age of a first-time homebuyer (vs. 47 for repeat buyers). The survey also found that first-time buyers have a:

  • higher incidence of using a mortgage broker
  • lower level of lender loyalty
  • higher incidence of using online resources for mortgage research
  • higher use of social media, and
  • greater time spent doing mortgage research.

Mortgage Paydown

31%: of recent buyers reported making either a lump-sum payment or increasing their regular payment or both, in order to pay off their mortgage sooner (vs. 29% in the 2011 survey).

44%: of recent buyers have their mortgage payment set higher than the minimum required (vs. 39% in the 2011 survey).

Setting a budget

80%: of recent buyers reported that they had established “at least to some extent” a household budget.

66%: of those who established a budget assessed the potential impact of rising interest rates on their budget. (This is a conversation that all consumers and mortgage advisers should be having together.)

66%: assessed the potential impact of a loss of income on their budget.

76%: assessed the potential impact of rising expenses on their budget.

Survey background: CMHC’s survey was conducted online and polled 3,502 recent mortgage consumers who were the prime decision makers. The survey took place in February and March 2012. The survey was limited to those who have had a mortgage transaction in the preceding 12 months. CMHC has conducted this survey since 1999. Here is last year’s survey: 2011 CMHC Mortgage Consumer Survey

Acknowledgement: This data is managed by CMHC’s in-house Marketing Research Group. The two main leads on the project are: Brett Dietrich, Specialist, Marketing Research and Measurement; and Ken Brinston, Manager, Marketing Research. Our greatest compliments go out to Brett, Ken and their whole team for polling good questions and compiling one of the best MCS reports yet.

Rob McLister, CMT

  1. 31%: of recent buyers reported making either a lump-sum payment or increasing their regular payment or both, in order to pay off their mortgage sooner
    Numbers in this range have been reported by CMHC and others in the past … and I continue to be surprised at how low they are. Perhaps I shouldn’t be.

  2. With rates so low maybe people feel they can get a better return elsewhere vs. paying down their mortgage.
    I think most people are just broke. :)

  3. Hi Joe,
    Thanks for the note. It’s nice to see a 5 basis point increase in the number of people making higher-then-necessary payments. There has been a lot of writing in the last year about taking advantage of low rates to chip away at principal. Perhaps it’s sinking in.

  4. 83%: of those using the services of a lender 77%: of those using the services of a broker said they were satisfied with their experience.
    How interesting. Clearly some Brokers have a superiority complex because the Banks satisfaction benchmark should be the starting point. If you can’t compete on rates (Did anyone recently get a 2.99%, 5 yr fixed from their Broker?) and you can’t beat the Banks on service, you clearly have no business being in business!

  5. At the end of the day, though, they still have debt to repay, and the monthly payments sure aren’t going down.
    And if people really are broke with mortgage interest rates in the mid-3% range, Heaven help us all when rates rise.

  6. Hi Banker,
    It’s tough to draw conclusions about client satisfaction from a 6% difference in one study. Maritz Research data from November, for example, found that 90% of consumers were satisfied with their broker, vs. 87% who said they were satisfied with their bank.
    Either way, there are fantastic bank reps and horrendous bank reps, just like there are terrific brokers and terrible brokers. Experiences vary widely depending on the individual you deal with.
    Regarding rates, it should be noted that brokers had 2.99% or less in 2011—well before BMO’s promo. In fact, I remember Lendwise offering 2.79% for a while.
    Shortly after BMO launched its March campaign, brokers had multiple lenders at 2.99% or less. Moreover, those broker rates were for full-featured products whereby BMO’s offering had notable restrictions. And as of this minute, 2.99% is still available through the broker channel.
    There is more to satisfaction than rate, of course. A good independent adviser adds value by comparing features and restrictions at multiple lenders. That’s relevant because there will often be mortgage options that are more suitable than the one brand a bank specialist has to sell.
    Other differentiators include advice on term selection and deal structuring, interest reduction strategies, turnaround time, handholding throughout the process, negotiation with underwriters on tough files, and so on. In this respect, there are excellent brokers and bankers alike, but it sometimes takes effort to find them.

  7. I like this reply Robert – however, what advantage does a terrific broker have over a terrific banker?
    I have an idea of the answer, but ask yourself whether this is truly a distinct competitive advantage?

  8. Hi Outsider,
    In short, more options.
    Unlike a glove, one mortgage doesn’t fit all. No one lender will ever have the best rates for all terms, the best features and flexibility, the best underwriting policies, the best penalty and refinance policies, and so forth.
    Good mortgage planners provide a wide choice of lenders, and know those lenders like the back of their hand. That helps borrowers find the most suitable mortgage possible and, in most cases, lower borrowing costs.
    As good as the top bank reps are (and we know some excellent professionals at the banks and CUs), they are still limited by a requirement to sell just one brand of mortgages.

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