Find us on Google+ Google+

Friday, March 29th, 2024

Broker Channel Market Share – Q3- Ask a Vancouver Mortgage Broker

It seems that more power is being concentrated in the hands of fewer lenders. The mortgage broker channel’s top 10 lenders accounted for 85.6% of its volumes last quarter, according to data from D+H. That’s the highest level since we started tracking D+H market share reports in 2010.

Vancouver Mortgage BrokerIt’s against that backdrop that we see a micro trend taking place with credit unions. While still a tiny slice of the market, CUs posted an 88.5% jump in broker volume over the last year.

Credit union growth is a trend with legs. For one thing, CUs have a regulatory edge versus federally governed banks. No one is sure how long that will last and there are exceptions by province, but it enables them to offer things like:

  • 80% loan-to-value HELOCs (most lenders are capped at 65%)
  • Lower qualification rates on uninsured mortgages
  • Cash-back down payment mortgages (not our favourite products).

Some CUs have major growth aspirations and an increasing amount of deposits to lend out. Many of them see brokers as a ready-made distribution channel. On top of that, CU growth in 2014 will likely be accelerated by mergers.

(On a side note: We’ve heard an unconfirmed report of a large merger in the works. If true, it would result in multiple entities forming the largest CU in Ontario.)

*******

Here are the current market share leaders in the broker space, as of Q3…

Rank 

Lender

Market Share*

12 Mo
Change

1

Scotiabank

18.7%

-450 bps

2

First National

16.3%

-100 bps

3

Street Capital

10.7%

+310 bps

4

TD Canada Trust

10.6%

+250 bps

5

MCAP

9.3%

0 bps

6

Home Trust

7.0%

+110 bps

7

National Bank        

5.0%

+150 bps

8

RMG Mortgages

3.4%

+190 bps

9

Equitable Bank

2.4%

+20 bps

10

Laurentian/B2B

2.2%

-130 bps

Quick takes:

  • Mortgage banks added 2.3 percentage points of market share while banks dropped 0.9 percentage points
  • The most eye-catching change was in Scotia’s share, reportedly down 4.5 percentage points. We surveyed a few big brokers (admittedly not a representative sample) for their thoughts on why this happened. We got answers like: 
    • Tighter underwriting rules
    • New restrictions on Scotia’s specialty mortgages (e.g. rental and new immigrant programs)
    • An unappealing variable rate
    • Slower turnaround times, possibly due to more deal scrutiny during the approval process and higher underwriter workloads.

      It should also be noted that a greater amount of Scotia’s volume has been routed via the MorWeb platform in the past year. Those numbers are apparently not reported by D+H, so it’s hard to say how that affects Scotia’s (and other lenders’) share of the market.
       

  • The top 7 lenders were the same as one year ago, with the only exception being Street Capital and MCAP swapping 3rd and 5th positions

 

 By Robert McLister, Editor, CanadianMortgageTrends.com

 

Comments are closed.