Mortgage Consumer Research from Maritz
A highlight of the just-concluded CAAMP conferencewas the presentation by Maritz. Every year Maritz shares its mortgage consumer research findings, and they are insights that lenders and mortgage professionals can actually use to improve their businesses.
What follows are highlights from this year’s data, as presented by Kyle Davies from Maritz Research Canada…
- 80% of Canadians say they are “comfortable, content, confident, and/or secure” with their mortgage debt
- That leaves 20% who aren’t. That 20% should be viewed in perspective, however. StatsCan finds that over one quarter of Canadians consider themselves “very stressed” in general, says Davies. (Mind you, there’s no word on what percentage of Canadians are complacent by nature.)
- 28%: Mortgage broker market share (of all outstanding mortgages)
- That’s up from 25% last year, and the highest level in the last six years
- Mortgage broker share is strong (40%) on homes purchased in 2013
- 55%: Bank market share (of all outstanding mortgages)
- 44%: The ratio of consumers who have a good or full understanding of brokers
- Up from 33% three years ago
- Davies said it’s rare that consumer awareness of an entire industry rises 33% in three years, calling it a “tremendous accomplishment.”
- Top five reasons people deal with brokers:
- 57% say it’s to get the best rate
- 10% of consumers said that the “only” reason they chose to use a broker was to get the best rate
- 54% of broker customers were “very satisfied” with the rate they got, versus 43% of bank customers
- “Rate is a driver of choice, but not satisfaction,” Davies says. He adds that rate is not a key factor in repeat business. Good advice is the #1 factor driving satisfaction; #2 is personalized service; #3 is “reliability.”
- 41% say it’s to get “multiple quotes”
- If you’re a broker, how many quotes do you provide your clients?
- 36% say it’s to have someone else do the research
- 34% say it’s to help them “understand the options and process”
- 32% say it’s to help with the paperwork
- 57% say it’s to get the best rate
- Top five reasons people don’t deal with brokers:
- 29% say they’d rather deal directly with the lender
- 28% say they don’t want to pay a broker
- It’s remarkable that so many consumers still hold the misconception that brokers charge broker fees on prime mortgages. The overwhelming majority do not.
- 21% say they don’t want to deal with an unfamiliar lender
- 20% say they simply didn’t think about a broker
- 17% say they don’t want to switch lenders
- Client conversion rates:
- Banks convert 4 out of 5 prospects into customers
- Brokers convert 2 out of 3
- 57% of broker customers receive only one quote from their broker
- That’s despite the clear demand for multiple quotes, and despite many brokers’ claim to deal with 40-50+ lenders. Davies suggests brokers remember that “people want to feel like they’ve made (their own) decision.” Offering at least two good options provides a degree of empowerment for clients.
- 19% of Canadians are do-it-yourself (DIY) mortgage shoppers, according to Davies
- These are folks who shop around extensively, don’t seek advice and don’t rely on family and friends for their mortgage opinions. They are typically age 55+ and are already homeowners.
- 42% of Canadians actively seek advice when shopping for a mortgage and want to be presented with a limited number of suitable options from their mortgage professional
- Davies noted that this can be considered brokers’ core market of customers
- Given that broker share is 28%, this leaves 14 percentage points of share on the table, he suggested
CAAMP will make the full Canadian Consumer Survey report available in December on www.caamp.org.
By Rob McLister, Editor,CanadianMortgageTrends.com