Mortgage volumes in the broker channel continued to grow in the fourth quarter. D+H data reportedly confirms that brokers did 12% more business in Q4, versus the same period last year. 

Some of that business was an attempt by borrowers to beat the government’s mortgage rule changes. Those policies came into effect on October 17, 2016 (new high-ratio insurance restrictions), November 30, 2016 (new low-ratio insurance restrictions) and January 1, 2017 (new insurer capital requirements).

But these weren’t the only headlines last quarter.

The top 10 broker channel lenders now account for a whopping 87.1% of broker volume, as of Dec. 31, 2016. That’s the highest ratio we’ve ever seen since CMT began tracking this data in 2010.

And that trend may be here to stay. Large lenders have an edge that’s more vital than ever: more funding options. Smaller non-balance sheet lenders are now under the gun, given the Finance Department’s policy rampage against mortgage competition.

What everyone wants to know now is, how will Q1 play out? Anecdotally, most non-bank lenders and brokers we query have seen business drop roughly 15-20% year-over-year. There are exceptions, of course, banks being one of them. Most expect Scotiabank and TD to light it up in calendar Q1 as they’re among the most cost effective options now for uninsurable mortgages.

In any event, and without further ado, have a look at the reported market share for the broker channel’s top-10 lenders…

Rank	Lender	Market Share Q4 2016*	12 Mo Change
1	Scotiabank	18.5%	+170 bps
2	MCAP / RMG	16.0%	+510 bps
3	First National	11.2%	-240 bps
4	Street Capital	9.1%	+110 bps
5	Home Trust	7.7%	-60 bps
6	TD Canada Trust	7.0%	-70 bps
7	Merix Financial	6.7%	-60 bps
8	Equitable Bank	4.9%	+70 bps
9	National Bank	3.6%	-50 bps
10	B2B Bank	2.4%	-200 bps

 

Quick takes:

• Scotiabank, the single most important partner brokers now have (thanks to its product range), posted strong performance last quarter. It’s held the top spot for almost six years and that ain’t changing anytime soon—not with the DoF/OSFI digging it a golden moat against non-bank competitors.
• MCAP/RMG, which is being reported as one entity for the first time, surged 510 bps to capture second spot, behind only Scotiabank. Its balance sheet relationships notwithstanding, MCAP/RMG likely won’t post such spectacular growth in 2017.
• B2B was back in the top 10 this quarter (just barely), but is still down 200 bps from a year ago. Its decline was topped only by First National, which continued to shed market share thanks partly to uninspiring pricing.
• Among the provinces, Ontario once again posted the largest year-over-year gain in submission volume, up 3.7%. Alberta posted the biggest drop, down 1.6%, followed closely by B.C., which saw broker volumes fall 1.3%.
  

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• Data 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. The data above is not confirmed, but is believed reliable. Note: These market share figures do not count Newton volumes (D+H’s small but growing competitor) and leave out a few lenders who D+H doesn’t report, like CMLS Financial and Manulife.