As the financial crisis continues to loom over Canadians and the global economy, mortgages have become ever more important in supporting consumers through difficult times. With this in mind, it is no surprise that the mortgage market has seen some significant changes over the last twelve months.
The first trend seen in 2011 was the rise of alternative lenders. With traditional lenders tightening their lending criteria, alternative lenders have been able to offer more flexible and attractive financing options to a broader range of borrowers. These lenders have also demonstrated increased willingness to provide loans where the size or risk factor would otherwise have been prohibitive.
A second trend has been a tightening of regulations surrounding the lending process. In Canada, the Office of the Superintendent of Financial Institutions (OSFI) has imposed tougher rules on lenders, including increased capital requirements and restrictions on the types of mortgages that can be offered. This has led to a decrease in the number of mortgages approved and an increase in the amount of time it takes for a mortgage to be approved.
The third trend has been a shift in how mortgages are originating. Increasingly, Canadians are taking a more proactive approach to obtaining their mortgages. They are using technology, such as online mortgage calculators, to better understand their financing options, as well as searching out a wider variety of lenders in order to secure the best rates and products.
Fourth, banks have become more willing to accept higher levels of debt in order to acquire customers. As the competition among lenders intensifies, banks are offering mortgages with lower interest rates and more features in order to attract new customers and retain existing ones. This, in turn, has led to an increase in the amount of debt Canadians are carrying.
Finally, the fifth trend has been the emergence of online mortgage brokers. These brokers offer customers access to a vast range of mortgage products and services while providing a convenient online application process. The ability to compare different mortgage offerings quickly and easily has made online mortgage brokers a popular choice for Canadians looking for the best mortgage deal.
Overall, these trends reflect the changing nature of mortgages in Canada; mortgages which will continue to evolve as the economic climate persists. Consumers should evaluate their current financing options frequently to ensure they are getting the best deal available. New entrants to the market, such as online brokers, offer customers access to a wider selection of products while providing a more convenient application process. At the same time, existing lenders must adhere to stricter regulations and commit to responsible lending practices in order to remain competitive. Despite the increasing complexity of the mortgage industry, customers should keep in mind that it is possible to secure affordable financing even in difficult times.
This article was contributed on Dec 16, 2023
