With inflation at a recent high, low housing inventory levels, and more frequent delinquencies, the Canadian mortgage industry is facing major change. As a lender, staying up-to-date on the rapidly changing credit landscape and consumer behaviour can help improve credit risk strategies and decisions. 

• See the Equifax Canada Market Pulse Consumer Quarterly Credit Trends Report for more details on how economic pressure could potentially impact consumers

 

Mortgage Renewal Woes 

Current high interest rates mean that upcoming mortgage renewals will be pivotal for homeowners. Consumers who locked-in historically low interest rates in 2020 — particularly those with substantial loan amounts — may face challenges in sustaining their payments if required to renew at much higher interest rates. Not all borrowers are created equal, and the capacity to pay may fall for certain consumer groups, if interest rates remain elevated. 

 

Lenders should pay close attention to consumers nearing renewal who are defaulting on their small debts, as this information could be vital in shaping a mortgage lending strategy. 

 

What to Consider in the Mortgage Lending Lifecycle

Insights into consumer behaviour can help you identify clients at risk of churn, and assist you in  developing and prioritizing renewal efforts. Each stage of the mortgage lending lifecycle presents its own challenges and opportunities for lenders, so keep these key considerations in mind: 

• evaluate prospective customer needs 

• authenticate information to combat fraud and verify an applicant’s mortgage affordability 

• analyze the competitive landscape to maintain customer loyalty and satisfaction 

 

Find, Attract, and Retain Mortgage Customers in a Challenging Economy

While growth and retention may seem difficult in today’s credit landscape, there are still pockets of opportunity, if you know where to look. A slight shift in focus and a deeper understanding of the market could take your portfolio performance to new heights. Below are three tips for how you can help improve mortgage lending strategies:

1. Know the current market conditions and assess your portfolio based on that information

2. Prioritize renewals and invest in your best customers

3. Compare performance to benchmark and beat the competition

 

Whether you’re seeking new prospects, evaluating mortgage affordability, or managing your existing customer base, Equifax Canada can provide you with the insights you may need to improve portfolio performance across the lending lifecycle. For more information, visit our website. You can reach us directly at 1-855-233-9226 and follow us on Twitter and LinkedIn. 

 

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