Canadian brokers navigate pricing chaos, slow turnaround times
In that environment, Allard said a rising number of borrowers are concentrating less on what’s happening with rates and more on their overall financial picture and ability to handle mortgage payments.
“There’s a lot of uncertainty over whether rates are going up, down, or sideways,” he said. “I find a lot of borrowers have resorted to more of a cashflow conversation – ‘Am I comfortable with the cashflow?’ There’s a bit less of a focus on what will happen with rates because I think it’s so uncertain.”
A recurring pattern has also emerged among lenders such as credit unions and others that compete aggressively on rate. Promotional pricing draws a flood of applications, leading to a deterioration in service levels and – often – a pullback on rates within days.
“Credit unions will come out with a pricing promo and within a week they have to raise rates or their turnaround time just goes super slow,” Allard said. “It’s an interesting phenomenon that’s happening now repeatedly in the industry.”
A solution for lenders facing those issues, he suggested, might be a more targeted approach to broker relationships. “I think it would be prudent for lenders to limit the amount of brokers that they work with, work with the brokers that they choose to work with, and just offer adequate turnaround time and have a more loyal broker base,” he said.
