While Big Banks Hold onto Mortgage Share, Who do Brokers Prefer Working With?
According to recent CAAMP reports, though 55 per cent of mortgage shoppers will start with mortgage brokers, only 27 per cent will also close with them. The majority of Canadians will still stick with their major banking institution instead of utilizing an online broker, in contrast to buyers in our neighbour south, and even to the U.K. where online mortgage shopping has picked up by 33 per cent over the last year (Greenlight).
Up from the quarter previous, Canadian big banks took a 56.5 per cent chunk of mortgage broker volume last quarter (Davis+Henderson). As per market share, the top mortgage lenders in Canada currently look like this:
- FirstLine Mortgages
- Scotia Bank
- First National
- TD Bank
- MCAP Service Corporation
- Street Capital
- National Bank
The Canadian Mortgage Professionals (CMP) issued its own review, entitled the 2010 Brokers on Lenders Survey, compiling the opinions of 350 different brokers to see who they feel the top mortgage lenders in the country are. Of this pool, 65 per cent had been in their position as a broker for more than five years, and over half had been a lender at some point in time.
This populace of experienced brokers used 11 criteria with which to grade the lenders they work with: approval/loan turnaround times; underwriter support; BDM support; broker support; transparency of commission structure; broker training; IT and electronic/ technology; interest rates; product range; overall service level to brokers; and satisfaction index on overall credit policy.
In order to even be considered in the final tally, a lender had to receive at least 50 votes. The top three lenders in each category then received a gold, silver or bronze medal. Here is what the top mortgage lenders in Canada, according to the brokers that deal with them, look like, with the number of medals each was rewarded in parenthesis:
- Merix (10)
- First National (8)
- MCAP Service Corporation (6)
- Scotia Mortgage Authority (2)
- FirstLine Mortgages (2)
- Home Trust (1)
- Street Capital (1)
- ING (1)
- Macquarie (1)
- ResMor (1)
While the lists stand very close, both placing MCAP, Firstline Mortgages and First National in their top five, the broker’s list includes two non-bank lenders, Home Trust and ResMore, in absence of TD and National Bank.
A major asset of selecting to work with an online brokerage is the high probability that they will have access to virtually all the best product offerings each of the top mortgage lenders, regardless of which list they appear, are offering.
According to the CMP report, approval/turnaround time was the most important criteria, receiving 142 votes, while broker support was actually voted the least important criteria, receiving only 10.