When evaluating the mortgage market, one of the best ways to understand how the industry is faring is to look at the ways consumers are going about the process of finding a mortgage. The manner in which borrowers react to rules and regulations, use various tools to search for mortgage information (including lender websites and mortgage calculators) and whether or not they choose to use a mortgage broker, are key indicators of the health of the overall market.
Recently, the Canada Mortgage and Housing Corporation (CMHC) released a survey that revealed some of that information, and its results serve to shine some light on how borrowers feel about the mortgage process in 2013.
Obviously, the internet plays a huge role in how people research mortgage options. The report states that 63 percent of consumers searched for information about mortgages online. On top of that, 84 percent of consumers researched mortgage rates online. While that already represents a large majority, it is highly likely the number will continue to grow. That means lenders and brokers who haven't already put a lot of work into developing their online footprint are far behind the curve, and those who already have put in that effort will need to continue to do so in the future.
A lot of the online research traffic revolved around mortgage calculators, with 63 percent of consumers who searched for mortgage information online saying they used one. And a majority of those that used a calculator did so on a lender site. With so many people looking for that specific option, and only 13 percent of them using a calculator on a broker website, this indicates that it would greatly benefit mortgage brokers to expand their calculator options online, especially when it comes to providing options to compare rates.
Brokers versus lenders
Twenty-three percent of consumers used a mortgage broker, which remained steady with the 2011 and 2012 numbers. But almost half (49 percent) of first-time buyers chose that route, showing that people less comfortable with the mortgage process are more likely to turn to an experienced professional.
One surprising finding, for both brokers and lenders, was a lack of follow-up by those parties. The rates for both of them were below 50 percent (though brokers were close, at 49 percent, while lenders were only at 33 percent). This further shows that when it comes to providing options and service to borrowers there is still a lot of room for improvement.