Broker Channel Market Share – Q3- Ask a Vancouver Mortgage Broker
December 16, 2013 by Adil Virani
Filed under Home Series, Latest News, Latest Rates, Mortgage FAQ, Recent News, Selling Your Home, 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.
It’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.)
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Here are the current market share leaders in the broker space, as of Q3…
Rank |
Lender |
Market Share* |
12 Mo |
1 |
18.7% |
-450 bps |
|
2 |
First National |
16.3% |
-100 bps |
3 |
10.7% |
+310 bps |
|
4 |
10.6% |
+250 bps |
|
5 |
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