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2014 CMHC First-Time Homebuyers Survey

FTH survey 2014Today’s generation of first-time homebuyers are increasingly using the Internet to their advantage when researching mortgages. CMHC’s recently released 2014 First-Time Homebuyers Survey backs that up.

The report found that 84% of first-time buyers went online to gather information about mortgage options and features. The figure was 76% for repeat mortgage consumers.

First-timers were also more active online compared to other mortgage shoppers.

A full 80% of first-time buyers used an online mortgage calculator, for example, compared to 72% of other mortgage consumers.

Social media also factored into their online research in 2014, with 40% of new buyers using it when researching mortgage options —  almost double that of other mortgagors. That’s up from 28% just a year ago.

Moreover, one in five (21%) actively interacted using social media (by posting a review or rating of either a broker or lender), and another 30% used social networks to find referrals.

About half of first-time buyers who turned to online forums and 44% who used blogs rated these mediums as “very useful” during their mortgage research.

CMHC’s First-Time Homebuyers Survey had other interesting tidbits as well:

  • 53% said family members “greatly influenced” their home-buying decisions (vs. 37% for real estate agents, 36% for mortgage brokers and 28% for lenders).
  • 40% of first-time buyers incurred unexpected expenses during the home-buying process. Common examples were…
    • Adjustments (40%)
    • Lawyer fees (36%)
    • Land transfer taxes (30%)
      (We as mortgage professionals owe a duty to our clients to advise of any expected closing costs. When we don’t, we shouldn’t be surprised if we’re held to blame.)
  • 54% reported arranging their mortgage with the financial institution they were dealing with most.
    • Among repeat buyers, 67% stayed loyal to their existing lender
  • 48% of newbie buyers arranged their mortgage through a mortgage broker (vs. 40% for repeat buyers).
  • Those using a broker were 85% more likely to switch financial institutions when securing a mortgage.
  • Fewer than half received any form of post-transaction follow-up (Only 41% of those who used a lender and 49% of those who used a broker were contacted after closing).


Joven ejecutivo optimista trabajando en un ordenador,estudiante.Satisfaction

  • 80% of first-time buyers said they were satisfied with their lender.
  • 70% of broker customers said they were satisfied with that broker, down five percentage points from last year. (There’s obviously work to do here. The danger is that commoditization of routine mortgage advice leaves consumers feeling like they’re receiving less value from their originator. In a world where rates are prominent and seemingly easy to compare online, brokers will need to reemphasize that their usefulness goes beyond price shopping.)


Attitude of First-Time buyers

  • 33% of fledgling buyers said they “totally agreed” that they got the best mortgage deal for their needs (a conspicuously low stat — one that spells opportunity for originators who can instill confidence in young borrowers by better educating them).
    • By contrast, 52% of repeat buyers said they got the best mortgage deal for their needs
  • 37% “totally agreed” that they had a good understanding of the mortgage options available to them.
    •   vs. 59% of repeat buyers
  • 28% “totally agreed” that the process of getting a mortgage was easy and straightforward.
    • vs. 44% for repeat buyers
  • 41% of first-time buyers receiving advice on long-term mortgage strategies “totally agreed” that they would use the same mortgage professional for their next mortgage transaction.
    • vs. 22% of those who had not received that kind of advice

Survey note: CMHC’s survey interviewed 860 first-time homebuyers from across Canada. Individuals polled had all undertaken a mortgage transaction in the past 12 months.

By Rob McLister and Steve Huebl