How to Leverage Market Intelligence to Inform Your Mortgage Portfolio Strategy
By Equifax Canada
In a highly competitive mortgage market, lenders need to be proactive in their approach to targeting mortgage borrowers ahead of their renewal deadlines.
Staying up-to-date on the rapidly changing credit landscape
can help improve good credit risk
strategies and decisions. Below are three ways you can
leverage market insights to improve your mortgage portfolio
1. Make Strong Mortgage Portfolio Decisions
Mortgage activity is driven by home sales and renewals. According to a recent Equifax Canada Quarterly Consumer Credit Trends report, average new mortgage amounts fell by 38.5 per cent from Q4 2021 across Canada in the last quarter of 2022.
With Canadian mortgage marketplace insights, you can
strengthen your acquisition, retention, and delinquency decisions.
As a lender, it is important to understand Canadian mortgage trends,
what other financial institutions are doing, as well as your
customers’ financial position and their capacity to take on a new
mortgage. Monitoring changes made by your market-sharing peers,
relative to current market trends, can help you confidently set your
2. Adjust Product Strategies
Almost 50 per cent of new mortgage volume comes from
refinancing and renewals, underlining the importance of customer
retention. In Q4 2022, new mortgage
originations fell by 38.5 per cent compared to 2021. Lenders who
maintain a competitive rate could be more successful in retaining
price-sensitive customers, as most upcoming mortgage renewals for
consumers are at a much higher rate. Having insight into current
mortgage and economic trends can help to inform product strategies and
internal processes so that they meet customers’ needs.
3. Compete with Industry Peers
Historically, low interest rates have been the primary driver of mortgage growth in Canada. However, rising interest rates and the sharp acceleration of home prices have meant that monthly payments have risen significantly.
As interest rates rise, consumers renewing or refinancing their mortgage may face affordability issues. This may prompt them to search for alternatives, and you will lose lower-risk customers who may qualify for competitive offers. Competing with your peers by using recent portfolio trend insights can help steer your mortgage portfolio strategy so that you can stand out as a lender, retain good customers, and maintain a strong portfolio.
Learn how insights into the mortgage market can help steer your mortgage portfolio strategy. Contact your Equifax Account Representative. You can also reach us directly at 1-855-233-9226 and follow us on Twitter and LinkedIn.
This article is published by Equifax Canada Co.® 2023. All rights reserved. No part of this article may be reproduced, copied or transmitted in any form or by any means, or stored in a retrieval system of any nature, without the prior permission of Equifax Canada Co. This article is for informational purposes only and is not intended to be legal or business advice.
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