Canadian homebuyers are seeking the best mortgage price, even if that means sacrificing personalized mortgage advice, according to a recent survey conducted by Rates.ca. Of those mortgage shoppers, 63% admit they are open to using online lenders if the price is right.
How Low Can You Go?
Nearly half (45%) of mortgage shoppers say they would need to save at least 0.05 to 0.20 percentage points on the rate to use an online lender. While 18% of shoppers say they wouldn’t need any incentive. Only 16% of Canadians say they won’t use an online lender.
A further breakdown reveals just how much Canadians are hoping to save.
|The Interest Rate Savings Needed to Sway Canadians to Use an Online Lender||Percentage of Canadians|
|0.20%-points or more||19%|
Mortgage Shopping Key Considerations
When it comes to shopping for everyday items, brand names can play an important factor. Not so for mortgages. Just 23% of Canadians consider the brand name when comparing mortgage products.
Apart from the lender, there are, however, three key considerations Canadians are looking for in a mortgage. Forty-seven percent say getting the lowest rate is of the utmost importance. Another 19% say keeping the total cost of borrowing as low as possible is paramount, while 14% are searching for clear communication of the conditions and features of their mortgage.
Insights into Mortgage Shoppers
The survey revealed that 18% of mortgage shoppers would prefer to process their mortgage through a strictly online lender so that they didn’t have to speak to anyone. Although another 16% would not deal with a lender that didn’t offer in-person or phone support, no matter the rate.
Where Are Canadians Getting Their Mortgage Information?
One-third of Canadians (34%) still rely solely on offline sources for their mortgage research.
|Mortgage Research Source||Percentage of Canadians|
|Online sources only||21%|
|Both online and offline sources||38%|
Not only that, one in four Canadians are getting their mortgage information from family and friends.
|Mortgage Information Source||Percentage of Canadians|
|In-person advice from a bank, lender or broker||45%|
|Friends and family||27%|
|Online sources such as a bank or lender website||42%|
|Rate comparison sites||20%|
The Future of Mortgage Shopping
In many cases, online lenders are able to pass significant savings down to the customer, generating lower and more competitive rates.
Many of these sites also make mortgage insights and other resources available to visitors, such as mortgage affordability, mortgage payment, and mortgage penalty calculators. These tools can help borrowers make informed decisions, with or without personalized mortgage advice.