Table of Contents
Executive Summary
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- Top takeaways
- Market overview
- Impact of COVID-19 on mortgage financing
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- Figure 1: Mortgage financing outlook, 2022-27
- Opportunities
- Mortgage digitization in Canada is gaining ground
- Fintech lenders can carve out a niche
- Mortgage brokers get a strong vote of confidence
- Challenges
- Customer service is a stronger switching trigger for older consumers…
- …while product specific reasons matter more to younger consumers
The Market – Market Factors
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- Immigrants a major driver of continued housing demand
- Market overview
- Major concerns about housing affordability for first-time buyers
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- Figure 2: Attitudes related to housing affordability, 2021
- Working from home increases housing demand
- Canada has an aging population, boosting home equity products
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- Figure 3: Proportion of 0-14s and over-65s in the Canadian population, 1988-2068*
Key Players – Competitive Strategies
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- Digital mortgage news
- EQ Bank's new Mortgage Marketplace is launched
- Digital mortgage broker Homewise secures new financing
- Canadian start-up Perch raises new funding for property financing solutions
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- Figure 4: Perch Canada Instagram post, 2022
- Ledn raises $70-million, launches bitcoin-backed mortgages
- Other news
- Key aims to make home ownership more attainable
- Newly launched Fundible allows Canadians to buy before selling
- Tech real estate start-up Properly raises $44 million
Key Players – Marketing Campaigns
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- Questrade enters the mortgage market
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- Figure 5: Questrade Facebook ad, 2021
- Figure 6: Questrade Facebook ad, 2021
- Nesto plugs speed and simplicity in finding the best rates
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- Figure 7: Nesto 30Sec - Low from the get go, 2021
- Bloom enters the reverse mortgage market
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- Figure 8: Bloom Finance Instagram post, 2021
- CHIP’s humorous take on staying in your own house
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- Figure 9: HomeEquity Bank’s CHIP Reverse Mortgage Commercial: Sore Back, 2021
The Consumer: Fast Facts
Mortgage Intention & Current Financing
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- One third of consumers plan to obtain a mortgage in the next five years
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- Figure 10: Intention to obtain a mortgage in the next five years, 2021
- More than half of 18-34s feel property has become a less attractive investment
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- Figure 11: General attitudes related to ownership and mortgages, 2021
- Half of current home-owners have a mortgage
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- Figure 12: Current type of Home Financing, 2022
- Shared equity mortgages are gaining in popularity among 18-34s
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- Figure 13: Current type of home financing, by age, 2022
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- Figure 14: Fraction Facebook post, 2021
- Non-Chinese Asian Canadians more likely to own home financing products
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- Figure 15: Current type of home financing (select), Non-Chinese Asian Canadians* vs overall, 2022
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- Figure 16: Capital Direct Facebook ad, 2022
Mortgage Lender Choice Factors
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- Besides rates, a current relationship is important
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- Figure 17: Choice factors when choosing a mortgage lender, 2021
- Figure 18: Meridian Credit Union Facebook ad, 2022
- Existing relationship matters more to older consumers
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- Figure 19: Choice factors when choosing a mortgage lender (select), 18-44s vs over-45s, 2021
- Younger consumers more influenced by special offers/incentives and recommendations…
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- Figure 20: Vancity Facebook ad, 2022
- …while special offers/incentives and easy approval also resonate more with men
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- Figure 21: Choice factors when choosing a mortgage lender (select), men vs women, 2021
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- Figure 22: BMO Desktop display ad, 2021
- Figure 23: TD Facebook ad, 2021
- Mortgage pay-down flexibility influences a fifth of consumers
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- Figure 24: Tangerine Facebook ad, 2021
- Other factors influencing lender choice
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- Figure 25: Duca Facebook ad, 2021
Mortgage Lender Switching Factors
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- Unhappiness with rates is the top factor motivating switching
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- Figure 26: Factors influencing switching of mortgage lender, 2022
- Rates are the most important factor
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- Figure 27: Vancity Mortgage switch Facebook ad, 2022
- Customer service is a stronger trigger for older consumers…
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- Figure 28: Factors influencing switching of mortgage lender (select), 18-44s vs over-45s, 2022
- …while product specific reasons matter more to younger consumers
- Consolidation is a reason for one in ten consumers
- Seven in ten mortgage holders feel switching is too much work
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- Figure 29: “Switching lenders involves too much work” (% agree), mortgage holders vs overall, 2021
Mortgage Finances
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- Mortgage brokers get a strong vote of confidence
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- Figure 30: Using a mortgage broker is a smart way to get the best rates (% agree), by age, 2021
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- Figure 31: Mogo email ad, 2021
- Over-55s are least likely to be impacted by rising rates
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- Figure 32: Attitudes related to mortgage finances (select), 2021
- Weak credit history hampering South Asian Canadians
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- Figure 33: My credit history has been a problem in obtaining a competitive mortgage rate (% agree), 2021
- Two in three consumers make their payments on time
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- Figure 34: Mortgage financing behaviours, 2022
- One in ten 18-34s have taken a payment holiday, a fifth use apps
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- Figure 35: Mortgage financing behaviours (select), by age, 2022
- A fifth have a variable rate mortgage
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- Figure 36: Alpine Credits Facebook ad, 2022
- Around one in eight has made an over-payment on their mortgage
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- Figure 37: Tangerine Mobile ad, 2021
Mortgage Attitudes
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- Private lenders viewed as a last resort option by many
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- Figure 38: Attitudes related to private lender and reverse mortgages, 2022
- Majority consider taking a reverse mortgage a bad financial decision…
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- Figure 39: CHIP Direct mail campaign, 2021
- …but two in five 18-34s are interested
- Young men are most digitally engaged
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- Figure 40: Digital mortgage attitudes (% agree), by age and gender, 2022
- Mortgage digitization in Canada is gaining ground
- Fintech lenders can carve out a niche
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Consumer qualitative research
- Abbreviations and terms
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