C 2009 Mortgage Honsumer Curvey

2009Mortgage

SurveyConsumerResults

canada mortgage and housing corporation

Mortgage clients areoptimistic

An overwhelmingly high proportion ofmortgage consumers (nearly 90%) believethat homeownership is a good long terminvestment and this optimism is fairlyconsistent across the country. Anotherindicator demonstrating confidence is thatalmost 70% of purchasers are of the opinionthat now is a good time to purchase a homein their community.

Confidence among mortgage consumers is also evident in their future moving

intentions. Overall, about one-third ofrecent mortgage consumers anticipateleaving or selling their home in the next fiveyears. Among this group, 87% state familyand or personal circumstances (i.e. growingor decreasing family size, medical issues, orjob transfer), or a general desire for changeis the main reason for selling or leaving.

Canadians are astutemortgage consumers

Today’s mortgage consumers show what can be interpreted as a fairly high level ofsophistication about the mortgage processand what it takes to carry a mortgage. Forexample, 80% were at least aware of theexistence of credit scores and one-third, atsome time, have actually contacted a creditagency to obtain their own score. They alsohave a good understanding of the maximumamount of their gross (pre-tax) income thatshould be used to service housing costs andother debt. Nearly nine-in-ten (87%)reported that this level should be 40% orless of gross income.

Canadian mortgage consumers are relativelyknowledgeable about the function andbenefits of mortgage loan insurance (MLI).Nearly three-quarters (72%) recognize thatMLI helps Canadians buy a home with asmaller down payment and 76% believethat MLI provides an important benefit tothe financial system.

Canadians manage theirmortgages prudently

Several survey findings point to Canadiansbeing careful in how they manage mortgagedebt including:

• 73% of first-time buyers used their ownresources for a down payment

• 75% of purchasers have a goal to bemortgage free sooner than their currentamortization

• 20% of recent purchasers have alreadymade a lump sum payment to theirmortgage.

• 40% of all recent mortgage consumersintend to reduce their amortization attheir next renewal.

Interestingly, as a means of reducing theiramortization, 30% of mortgage consumersintend to use a combination of themortgage features available to reduce their amortization.

nearly

90%of mortgage consumers believe home

ownership is a good long-term investment

2

2009 Mor tgage Consumer Sur vey Resu l t s

Canada Mortgage and Housing Corporation2

Key findings from the 2009 survey

• Mortgage clients are optimistic

• Canadians are astute mortgage consumers

• Canadians manage their mortgages prudently

• Client satisfaction levels still relatively strong

• First-time buyers increase their use of

mortgage brokers

believe mandatory MLI provides an important benefit to the financial system

76%

believe MLI can help borrowers buy a home witha smaller down payment and help build equity faster

72%

2009 Mor tgage Consumer Sur vey Resu l t s

Canada Mortgage and Housing Corporation 3

Client satisfaction stillrelatively strong

In 2009, the majority of mortgageconsumers (78%) were satisfied with theservice provided by either their lender orbroker. Client satisfaction was also fairlyconsistent across all market segments.Compared to 2007, the proportion of thosesatisfied is down consistently by about fivepercentage points. Overall, only a minorityof respondents (14%) expressed any degreeof dissatisfaction. The survey showed that

getting the best rate or deal are the mostimportant factors driving client satisfaction,cited by 57% of respondents.

Mortgage consumers were equally satisfiedwhether they used a lender or broker (79%lenders vs. 75% for brokers), but forslightly different reasons. For example, 22%of those using a broker indicated the mainreason for their satisfaction was based onthe “service” provided, vs. only 11% forthose using a lender. Conversely, thoseusing a lender were nearly twice as likely to mention “a good relationship” as thebasis for their satisfaction (22% for lendersvs. 12% for brokers).

In the majority of cases (76%) clientsremained loyal to their existing mortgagelender. In the case of first-time buyers, 47%remained loyal to their existing financialinstitution. Loyalty was strongest amongrenewers at 90% (up from 83% in 2007).For the other three mortgage consumersegments 2009 has seen a modest decreasein lender loyalty. This is most evidentamong first-time buyers where loyalty hasfallen to 47% from 67% in 2007, likely a

result of the increased use of brokers amongfirst-time buyers. For repeat buyers andrefinancers the decline has been moremodest: from 63% in 2007 to 59% amongrepeat buyers, and from 71% in 2007 to66% among refinancers.

First-time buyersincrease their use ofmortgage brokers

Survey results show that during the pasttwelve months about one-quarter of allmortgage transactions were arrangedthrough the mortgage broker channel. Mostnotably, broker share among first-timebuyers has increased to 44%, up from 35%in 2007. Among other market segmentsbroker share has remained stable. Inparticular, broker share among thoserenewing their mortgage continues to berelatively stable at 12%.

Demographically, brokers tend to do betteramong younger purchasers aged 25 to 34years (42% share), and female purchasers(43% share).

Rather satisfied Totally satisfied

41%35%

48%29%

76%

77%

10 20 30 40 50 60 70 80 90 100

First-time purchasers

Repeat purchasers

Refinancers

Renewers

42%36% 78%

41%38% 79%

44%34% 78%All segments

of purchasers have goal to pay off mortgage sooner than original amortization period

75%

of first time buyers use their ownresources for down payment - savings or RRSP

73%

First-time purchasers

28

35

44

All purchasers

27

33

38

Repeat purchasers

24

31 31

Refinancers

16

2825

Renewers

8

1412

Client satisfaction levels remain high Broker origination share by customer segment

© 2009 Canada Mortgage and Housing Corporation. All rights reserved. This presentation material is the property of Canada Mortgage and Housing Corporation. This presentationmaterial may not be reproduced, copied, or distributed, in whole or in part, in any form, without the prior written permission of Canada Mortgage and Housing Corporation.

The information, analyses, and opinions contained in this presentation material are based on various sources believed reliable, but their accuracy, completeness, and currency cannot beguaranteed. This presentation material is not intended to provide specific advice or recommendations for any individual or entity, and should not be relied upon in that regard. NeitherCMHC nor its employees, agents, and advisors shall have any liability for actions or decisions taken based in whole or in part on any information or analysis in this presentation material.

65363 29-06-09

www.cmhc.ca

2009 Mor tgage Consumer Sur vey Resu l t s

About the survey

CMHC completed an on-line survey of 2,507 recent mortgageconsumers—all prime decision-makers—and the result is aunique perspective on attitudes and behaviours.

CMHC has conducted this survey since 1999. The findingsare meant to be a CMHC contribution as your trusted partnerin mortgage loan insurance. We trust that you can use thesefindings to identify opportunities and build strongerrelationships with your clients.

DefinitionsFor the purpose of this survey, recent mortgage consumers aresegmented as follows:

First-time purchasers—those who purchased their first homein the past 12 months and took a mortgage.

Repeat purchasers—those who purchased a second orsubsequent home in the past 12 months and took a mortgage.

Renewers—those who renewed their mortgage in the past 12months.

Refinancers—those who refinanced their home through amortgage in the past 12 months.

When your goal is to comprehensively serve existing clients and find new ones, it’sreassuring to know that you’re backed by the wealth of Canada Mortgage andHousing Corporation (CMHC) information, insight, and industry-leading tools.Only CMHC delivers this complete support—support you need to confidentlygrow your business. After all, your clients aren’t the only people who are lookingtowards the future.

The 2009 Mortgage Consumer Survey is a tool to help you identify opportunitiesto grow your business and build stronger relationships with your clients.