In 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