7 mortgage trends to watch in 2019

Author: Marisa Nguyen Mortgage Consultants Group |

Reverse Mortgage Toronto

The mortgage business is always changing. And as we kick off 2019, there are important trends that you and your team should know about so you’re not caught off guard.

#1 | First-time Home Buyers Looking to Mom and Dad (or Grandma and Grandpa)

Many first-time homebuyers will need to call on “The Bank of Mom and Dad” (or Grandma and Grandpa) in order to have enough for their first down payment.

The reasons for this are two-fold:

  1. Mortgage rates in major cities have risen dramatically in the past couple years and getting the house they want in a competitive and pricey market can mean paying more than expected. Cue Mom and Dad to the rescue!
  2. A smaller down payment means higher mortgage payments and an increased strain on cashflow for your clients. Paying more up front can lower their overall monthly costs.

#2 | Mortgage Stress Tests Will Stress You Out

As the criteria for mortgage stress tests become harder and harder to pass, more of your clients (and you) are going to be disappointed. Many experts are saying new homeowners will have to lower their affordability by 10% – 15%, and everyone can expect to be faced with rising interest rates.

#3 | Housing Prices Are Going Up. Slowly

Many metro markets are seeing housing prices increase at a slower pace. This slow growth makes private lenders nervous and consequently lend less money. When you pair this with #2 on this list, it makes for both buyers and lenders nervous.

#4 | Increasing Growth for Lenders

With house prices going up and increased regulation on banks, private lenders, credit unions, and smaller banks will see increased growth. The increased demand for private lending will likely result in more FSCO regulations which will lead private lenders looking for exit strategies and liquidity issues.

#5 | The Rental Market Stays Hot

This is a good news / bad news situation. It’s good news if you’re a landlord or have clients who own rental properties, since the demand for rental units will continue to increase as home ownership stays unattainable for many Canadians. However, the bad news is that landlords will have trouble finding financing as lenders have a reduced appetite for these types of mortgages. This could result in increased rates on rental mortgages.

#6 | Customers Are Doing Their Homework

Customers want a transparent mortgage experience and more control of the process. More and more of them are researching rates, lenders, and calculating costs long before the set their first appointment with you. This makes it even more crucial for you to have a strong online presence. Make sure you have a polished website and an active social media account because if you don’t, they’ll take their business elsewhere.

#7 | Embrace the Online Experience – Because Your Clients Are

Technology is also changing how customers apply for mortgages. Many Canadians are expecting to be able to fill out their application, submit and sign documentation online. Paperless processing in the comfort of their home is what more Canadians are demanding. This means less face-to-face meetings and more online interactions – making it that you invest in technology to serve your clients better.

2019 will undoubtedly be an exciting year, and brokers who take advantage of the trends listed above will come out on top.

Are there any trends you’re noticing that isn’t listed above? Comment below.