Q4 2012 Market Share: Broker Lenders

market-share-mortgageThe fourth quarter of 2012 brought substantial market share changes among the top 10 mortgage broker lenders.

Scotiabank and First National, in particular, posted notable market share drops from the third quarter, at least according to Davis+Henderson (D+H) data.

Below is a rundown of how all the top broker lenders performed last quarter….

The Big 5

1)  Scotiabank (SMA) 
18.8% market share, -2.7 
ppsY/Y
Scotia’s broker commission cut in October contributed to a 4.4 percentage point (pps) plunge in its market share from Q3. Interestingly, Scotia started paying brokers 5 extra basis points for mortgages submitted through the MorWEB system, which competes with D+H’s Expert platform. (It’s less expensive for Scotia to receive deals through MorWEB.) That may have slightly impacted the market share numbers you see here. Scotia still maintains a huge lead over second-place First National. In Q4, it continued to offer highly competitive rates on special terms (like 2-, 3- and 10-year mortgages) and it has among the widest product selection in the broker market.

2)  First National
12.3% market share, +0.1 pps Y/Y
Commission cuts also weighed on First National’s Q4 volumes, with its broker share dropping a whopping 5.0 percentage points from Q3. The company reinstated full compensation in January, a move brokers naturally applauded. As far as pricing, First Nat. featured solid variable-rate and 10-year fixed pricing in the fourth quarter. First National also inked a deal with MorWeb, which will affect the D+H-reported market share you see here.

3)  MCAP 
10.2% share, +4.0 pps Y/Y
MCAP firmed up its third place position with strong 5- and 10-year fixed pricing. It also made its rental financing product more widely available and remained the only major non-bank lender to offer a secured line of credit.

4)  Street Capital
9.6% share, +2.2 pps Y/Y
Street picked up two points of market share from Q3 and moved up one notch to fourth place. A strong sales push and a revamped loyalty program highlighted its Q4 activity.

5)  TD Canada Trust
8.4% share, -0.8 pps Y/Y
TD fell one spot to fifth place. Thanks largely to OSFI guidelines, TD had to tighten up its equity lending program. It did that by limiting loan-to-value to 65%, excluding salaried borrowers and requiring more documentation. On a positive note, TD increased LTV to 75% for rental applications.

The Balance of the Top 10

6)  Home Trust
7.5% share, +1.7 pps Y/Y
OSFI restrictions at the major banks are diverting a chunk of business (especially business for self applicants) to Home Trust and other “B” lenders.

7)  National Bank of Canada
5.1% share, +0.1 pps Y/Y
National’s status broker pricing was almost second-to-none for 30-day closes (especially for shorter terms like 1-years), and it remained unmatched for 180-day rate holds.

8)  ING Direct
5.0% share, +0.1 pps Y/Y
ING has shuttered its broker operations and will soon drop off this list.

9)  Merix Financial
3.4% share, –0.2 pps Y/Y

10)  Equitable Trust
2.6% share, +0.7 pps Y/Y
Since we’ve been tracking market share, this is the first time we’ve seen Equitable Trust, a non-prime lender, appear in the top 10. OSFI restrictions have helped it attract customers that big banks can no longer service.

Other Movers

  • MonCana Bank expanded to B.C. and rolled out better pricing, including a quick close product. It was also one of just a handful of lenders with the resolve to offer 35-year amortizations on conventional mortgages. That’s largely why its volume surged 868%, gaining it 0.8 pps of market share and lifting it into 18th place among broker lenders.
  • Canadiana’s Q4 volume fell 58% y/y, partly as a result of limited products and merely average pricing.
  • Radius Financial volume leaped 125.8% to earn 15th spot in market share. Among other things, the company launched RateWise, a reduced-frills product with more competitive rates.

Source: D+H puts out a terrific, non-public report called Lender Insights, which compiles lender market share data in the mortgage broker industry. We receive data from that report via third party sources and have quoted it here. This data is not confirmed, but is believed reliable. Note: These market share figures do not count MorWeb volumes but do provide a decent proxy of overall market share.


Rob McLister, CMT

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