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2012 CMHC Mortgage Consumer Survey
By Rob McLister, CMT
Wednesday, May 23, 2012
In the past year, more people have been:
Those are some key findings from this year's CMHC Mortgage Consumer Survey.
- researching mortgages online
- using mortgage brokers, and
- making extra mortgage payments.
This always-intriguing report also highlights continuing trends in online interaction, particularly:
Here's a sampling of important findings (italics ours)
- the emergence of social media as a tool used by mortgage consumers, and
- growth in do-it-yourself mortgage research.
71%: of consumers researched mortgages online, up from 65% in 2011. (Somewhere down the line we'll see this number in the 90% range.)
31%: relied solely on the Internet to gather mortgage-related information. (This is up from 22% last year, and further indication that consumers are increasingly taking mortgage research into their own hands.)
86%: of those researching mortgages online search for interest rates. (Rates are the #1 mortgage research topic. No surprise.)
61%: of buyers reported receiving explanations about the impact of mortgage prepayments and the effect of rising interest rates during their information and mortgage selection process. (Every mortgage professional in the country should be testing clients' tolerance for rates that are 200-300 basis points higher.)
71%: of consumers who went online used a mortgage calculator.
20%: of first-time buyers used social media (up from just 3% in 2010).
43%: of social media users used the interactive nature of social media either to solicit opinions or to provide answers to other mortgage consumers.
Mortgage broker share
27%: of mortgage consumers used a mortgage broker to arrange their mortgage in 2012, vs. 23% in 2011. (This is a record high according to CMHC. Key reasons for using a broker continue to be "getting the best rate or deal" and "receiving excellent service," say CMHC.)
1 in 5: mortgage renewers relied on a mortgage broker (up notably from last year's 15%).
Broker share of mortgage originations:
- 48%: among first-time buyers (Almost half of young buyers are choosing brokers, versus 35% five years ago. That's despite brokers' marketing budgets being microscopic compared to the banks.)
- 32%: among repeat buyers
- 27%: among those refinancing.
29%: of buyers reported receiving a recommendation to use a specific lender.
25%: of buyers reported receiving a recommendation to use a mortgage broker.
The most common referral source for lenders was a family member or financial planner. In the case of brokers, it was a real estate agent or a friend of the borrower.
5 weeks: the average time mortgage consumers spend doing research before making a mortgage product decision. First-time buyers spend an average of eight weeks.
Of those using a lender:
Of those using a broker:
- 68%: conducted their mortgage negotiations in face-to-face meetings
- 18% carried out those negotiations over the phone.
- 51%: conducted their mortgage negotiations in face-to-face meetings
- 21% carried out those negotiations over the phone. (It's likely that the convenience of remote mortgage transactions will overtake face-to-face meetings as time goes on. Countless brokers - and even some lenders - use remote models today. The ones we know all report good success, despite there being a learning curve to creating relationships "over wires".)
46%: of consumers were contacted by their mortgage professional after their mortgage closed. (42% for those using a lender directly vs. 55% for those using a broker.)
83%: of those using the services of a lender said they were satisfied with their experience.
77%: of those using the services of a broker said they were satisfied with their experience.
2 out of 3: consumers contacted after closing by their mortgage adviser "totally agreed" that they were satisfied with their services (versus about 4 in 10 among those who had not been contacted).
60%: of consumers contacted after closing said they "totally agreed" they would use their lender or broker again in the future (versus about one-third of those who were not contacted).
Loyalty to Lenders
88%: of renewers continue to remain loyal to their existing lender. (This hasn't changed much since 2009. Lenders continue to do everything they can to retain clients at renewal.)
59%: of first-time buyers reported getting their mortgage with the financial institution (FI) they were dealing with the most, vs. 47% in 2009. (This is a significant increase. FIs know the value of a young buyer and are being aggressive in courting their existing young customers.)
As with brokers, key reasons for using a lender continue to be getting the best rate or deal, and receiving excellent service.
2.7: the average number of lenders that recent buyers contacted in order to learn about mortgage options. (Includes only consumers who contacted lenders. Not all did.)
1.9: the average number of brokers that recent buyers contacted in order to learn about mortgage options. (Includes only consumers who contacted brokers. Not all did.)
34: the average age of a first-time homebuyer (vs. 47 for repeat buyers). The survey also found that first-time buyers have a:
- higher incidence of using a mortgage broker
- lower level of lender loyalty
- higher incidence of using online resources for mortgage research