There was a simple but important lesson for mortgage brokers in CMHC’s 2023 Consumer Survey released Wednesday: follow-up contact leads to more satisfied clients.
In a high-interest rate environment like today’s, borrowers are understandably less satisfied with their mortgage options.
The Canada Mortgage and Housing Corporation’s (CMHC) survey revealed a hard truth that mortgage borrowers overall were less satisfied with their brokers and lenders in 2023 compared to previous years.
Broker satisfaction came in at 71% this year, down from 86% in 2022, while lender satisfaction slid to 75% from 88% last year.
Aside from the economic and market conditions contributing to lower satisfaction, the report suggested other reasons for the decline included fewer mortgage offers being provided to clients (an average of 2.7 in 2023 vs. 3.2 in 2022) and fewer complementary financial products being offered by their broker (34% in 2023 vs. 64% in 2022).
However, borrowers who received follow-up contact by their mortgage professional to inform them of rising rates and market changes were “significantly more satisfied than those who did not,” the report found.
Unfortunately, less than half (49%) of borrowers said they were contacted by their broker following their mortgage transaction.
“Mortgage consumers need guidance and support (especially first-time buyers). They are seeking more online and offline information than before,” the CMHC report observed. “While online resources remain critical, especially to reach a younger crowd, human interactions with professionals should not be neglected, especially at key moments in the client’s journey.”
Lauren van den Berg, President and CEO of Mortgage Professionals Canada (MPC), said the findings provide a timely reminder to all mortgage professionals of the crucial role they play in their clients’ financial health and how consumers benefit from their advice.
“Homeowners have faced challenging economic conditions over the past year with interest rates rising at a record pace,” she told CMT, adding, “what we also see from this survey is that nearly three-quarters of homebuyers were satisfied with their broker experience.”
Many borrowers aren’t able to stay on top of economic developments, with many only learning of increases to their interest cost when they see their monthly mortgage statement, or at renewal.
In fact, nearly a quarter of respondents said they learned about the rise of interest rates by seeing the increase directly on their mortgage payments. Just 23% said they were informed by their broker.
“That’s why it’s so valuable for mortgage professionals to ensure their clients—both current and past—are well aware of market changes that have the potential to impact their finances,” she added. “For consumers, this is the immeasurable value that you can get when working with a broker through these uncertain times.”
CMHC’s consumer survey also revealed that over 4 in 10 respondents reported using a mortgage broker in 2023.
While that’s down from 51% in 2023, the percentage is “significantly” higher among residents of Ontario and British Columbia, those between the ages of 18 and 44, first-time buyers and refinancers.
Other mortgage facts from CMHC’s survey
CMHC’s latest consumer survey was chock full of mortgage data. The following are some of the highlights:
The homebuying process
27% of homebuyers received a gift to assist with their down payment
For those aged 18-24, the percentage rises to 43%
37% of buyers who received a gift said they wouldn’t have been able to purchase their home without it
35% of buyers reported experiencing unexpected costs during the homebuying process
Rising interest rates
74% of mortgage consumers have been or anticipate being impacted by the rise in mortgage rates
46% say they’ve had to adjust their household budget
24% report having difficulty making certain debt payments such as credit cards (14%) and mortgage payments (10%)
This percentage is higher for those in Ontario, first-time buyers and those between the ages of 35 and 44
70% said they are confident they got the best mortgage deal for their needs (vs. 86% in 2022)
66% say they are comfortable with their current debt level (vs. 84% in 2022)
78% are confident they will be able to make future mortgage payments (vs. 90% in 2022)
81% believe homeownership remains a good long-term financial investment (vs. 91% in 2022)