Home buyers, whether first-time or repeat buyers, are two times more likely to use the services of a broker than current home owners who are just renewing or refinancing, according to the Canada Mortgage and Housing Corporation annual Mortgage Consumer Survey released May 28.
Some 49 per cent of respondents who are buying a property said they used the services of a mortgage professional to ensure they got the best deal, compared with just 24 per cent of mortgage renewers.
The survey also found that renewing mortgage consumers largely remained loyal to their existing lenders, with 86 per cent staying with their current lender. Loyalty was lowest among first-time buyers, as only 47 per cent arranged their mortgage with their current main financial institution.
Although interest rate was the main reason for consumers to switch mortgage lenders (63 per cent), the survey found that 58 per cent cited an existing relationship with their mortgage lender or financial institution as the main reason for remaining loyal.
Mortgage expert Alisa Aragon, a broker for Dominion Lending Centres, cautioned consumers against sticking with their existing lender without first shopping around.
"Just because a lender had the best available product or rate for you when you obtained a mortgage one, three or five years ago, does not mean the same holds true in today’s market,” she said.
“With products and rates changing on an ongoing basis, you can’t possibly know what the best offering is for your unique situation without using a mortgage expert to do some investigating on your behalf. This will ensure you receive the best mortgage options and rate catered to your specific needs.”
However, the survey found that mortgage broker market share is up in most groups, especially among repeat buyers, where use of brokers has risen from 32 per cent in 2012 to 42 per cent in 2015.
Use of brokers is still strongest among first-time buyers, at 55 per cent this year compared with 48 per cent in 2014.
The survey also examined consumer habits in terms of renewal times and additional payments. It found that 60 per cent of mortgage renewers renewed before the scheduled date. The main reason cited for doing so was to avoid a perceived increase in rates (55 per cent).
CMHC also found large numbers of consumers taking steps to pay off mortgages early. Nearly half of mortgage renewers (49 per cent) have their monthly mortgage payment set higher than the minimum required amount. Nearly a third (32 per cent) have either made a lump-sum payment or increased their regular payment, or both, since last renewing their mortgage.