There’s no doubt that you know the names of the major chartered banks in Canada. It’s hard to avoid them. But how many of the top ten broker channel lenders could you name? Probably not that many, and that’s okay.
You see, where the big banks spend a crazy amount of money building awareness for their brands (thus increasing the cost of their products), broker channel lenders rely on independent mortgage professionals to distribute their mortgage products. These products are more flexible for the consumer, priced more favourably, and have no hidden clauses or malicious fine print. Instead of relying on brand loyalty to earn and keep your business, broker channel lenders rely on the merits of their products. This is a really good thing for you!
One question that is often asked is, “Are broker channel lenders safe? I mean, I’ve never heard of this lender before”. Here is the simple answer. Yes. Mortgage lending in Canada is highly regulated, and any lender that is represented through the broker channel has been properly vetted, and is legally allowed to lend you money. You have nothing to worry about when it comes to security. Besides, you have their money, they don’t have yours!
So, in an effort to bring awareness to some of the broker channel’s top lenders, let’s have a look at Canadian Mortgage Trends, a publication of Mortgage Professionals Canada and their release “Broker Lender Market Share Q4 2016” originally published on March 14th 2017, which goes through the top ten broker channel lenders, and how much business they write as a percentage of the overall industry.
Have a look through the list. How many of these lenders do you recognize? These are the real players providing Canadians with choice on the path to homeownership!
If you would like to discuss your mortgage options, please contact me anytime!
Broker Lender Market Share Q4 2016
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.