CoupleIn 2013, mortgage consumers are smarter than ever, but they still value good advice. That’s an important takeaway from CMHC’s latest Mortgage Consumer Survey, which breaks down their behaviour and tendencies in detail.

We’ve gone through the report and pulled out all the good stuff. If you’re pressed for time, check out the “must-read” data that’s highlighted. (The comments in italics are ours.)

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Mortgage Research

  • 66%: of mortgage consumers use
    online resources to research mortgage options and features

    • Last year it was 71%, with the same wording in the survey question. There is no way consumers are using the Internet less in their mortgage research. A spokesman at CMHC was unable to explain this result.
  • 84%: of consumers searched online for interest rates.
    • Is it any wonder that so much is being invested in rate comparison sites?
  • 63%: of consumers searched online for information about mortgage options.
  • 56%: of mortgage consumers who went online were searching for a mortgage calculator.
  • 4.6: The average number of visits to sites of different lenders.
  • 3.4: The average number of visits to
    sites of different brokers.
  • 2.9: The average number of
    lenders that were contacted to learn about mortgage options.
  • 2.1: The average number of brokers
    that were contacted to learn about mortgage options.

    • As rate comparison sites evolve, we’ll see this number rise.
  • 88%: of consumers found the
    information obtained from lender sites useful.
  • 84%: of consumers found the
    information obtained from broker sites useful.
  • 63%: of those who researched
    terms and conditions and compared interest rate costs of different financing
    scenarios, “totally agreed” that they obtained the best mortgage deal for their
    needs.

    • 47%: of those who did not
      engage in this research “totally agreed” they received the best mortgage deal
      for their needs.

Mortgage Calculators

  • 63%: of mortgage consumers
    who went online for mortgage information used a mortgage calculator.
  • 47%: used
    a calculator from a lender website.
  • 13%: used
    a calculator from a broker site.

    • With a few exceptions, lenders generally have more developed and unique mortgage calculators. Moreover, lender calculators rank better in Google.
  • 66%: of consumers used the
    calculators to determine the amount of their mortgage payments.
  • 39%: used a calculator that
    compared two or more mortgage offerings.
  • 36%: used a calculator to determine
    how much mortgage they could afford.

Broker share

  • 23%: of all consumers used a
    broker in 2013.

    • 27%: of all consumers used a
      broker in 2012.
    • 23%: of all consumers used a broker in 2011.
  • 49%: of mortgage
    originations among first-time buyers
    are handled by mortgage brokers.
  • 34%: of mortgage
    originations among repeat buyers are
    handled by mortgage brokers.
  • 17%: of those renewing used the services of a
    mortgage broker.

    • Last year it was ~20%. With lenders getting aggressive on renewal pricing and contacting people four to six months before maturity, this number won’t get much higher.

Loyalty to lenders

  • 88%: of consumers remain
    loyal to their lender.
  • 44%: of those who switched
    lenders said they did it to obtain a better interest rate.
  • 68%: of repeat buyers said they would remain loyal to their lender.
  • 68%: of refi consumers said they would remain loyal to their lender.
  • 54%: of first-time buyers said they would remain loyal to their lender.
    • In a commoditizing market, loyalty is becoming harder to earn.

Consumer satisfaction

  • 84%: of consumers arranging
    their mortgage directly with their lender were satisfied with the experience.
  • 81%: of consumers using a
    mortgage broker agreed they were satisfied

    • vs. 77% in 2012
  • 82%: of consumers agreed they were confident they got the best mortgage
    deal for their needs.
  • 25%: of mortgage consumers felt the mortgage process was not easy and
    straightforward

Referrals

  • 75%: of mortgage consumers agreed
    they were likely to recommend their broker to a family or friend.

    • Only 70% would recommend their lender

Value-added advice

  • 50%: of consumers said their
    lender or broker provided recommendations to accelerate their mortgage
    payments.
  • 63%: of consumers said who received
    value-added advice from their mortgage professional regarding specific mortgage
    terms and conditions “totally agreed” that they would likely use this mortgage
    professional to arrange their next mortgage transaction.

    • 33%: of those who did not
      receive this kind of advice “totally agree” that they’d use the same mortgage professional again.

      • In an online world, advice and relationships still matter, and this proves it. But we’ll see advice and relationships delivered differently as the Internet mortgage market evolves.
  • 60%: of consumers who
    received value-added advice from their mortgage professional “totally agreed”
    they are confident about knowing where to go in case of financial trouble in
    the future.

    • 34% of consumers who did not
      receive value-added advice from their mortgage professional “totally agreed”
      they are confident about knowing where to go in case of financial trouble in
      the future.

Customer follow-up

  • 49%: of consumers who used a
    broker were contacted following
    their mortgage transaction.

    • What a shockingly low number. Follow-ups after closing should be standard procedure to answer client questions, put a client’s mind at ease (that they’re not alone), thank them for their business and ask for referrals.
  • 33%: who used a lender were contacted following their
    mortgage transaction.

    • Ditto. It’s even more surprising that lenders don’t “get it.”
  • 70%: of those who used a
    broker and who had follow-up contact from their broker “totally agreed” they
    were satisfied.
  • 42%: of those who used a
    broker but received no follow-up contact from their broker “totally agreed” they
    were satisfied.

Survey background: CMHC’s survey was conducted online and polled 2,951 recent mortgage consumers who were the prime decision makers. The survey took place in March and April 2013. 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: 2012 CMHC Mortgage Consumer Survey


Rob McLister, CMT