With home prices still high across Canada and interest rates falling, mortgage professionals are navigating an ever-evolving market where the choice between fixed and variable rates adds new layers of complexity.
At Mortgage Professionals Canada’s recent National Mortgage Conference broker panel, five industry experts shared insights on everything from market outlooks and professional development to the fixed-versus-variable rate debate—even placing a $10,000 bet on where mortgage rates might head over the next six months.
Here are their top takeaways for the industry today and looking into next year:
2025 will be a good year for brokers
Now that mortgage rates are falling, homeowners are keen on either jumping into the market, or refinancing to a lower rate. This means more work for mortgage brokers.
“As prices stabilize, I think volume will be up. I think 2025 will be a better year for us than 2024,” said David Larock of Integrated Mortgage Planners.
Clinton Wilkins, team leader at the Nova Scotia-based Clinton Wilkins Mortgage Team, estimated his firm’s business might grow another 10% to 12% next year.
Ron Butler, of Butler Mortgage and host of the Angry Mortgage podcast, went so far as to bet $10,000 that conventional mortgage rates in the next six months will fall to 3.89%.
“The mortgage business is a cyclical business, if anyone hasn’t noticed,” he said “Next year’s going to be OK. This year is bad.” Instead of fretting, Butler suggested brokers embrace the cyclical nature of the mortgage industry and look forward to the boom times, while also accepting that some years will be disappointing.
However, simply waiting for the Bank of Canada to readjust its overnight interest rate isn’t enough for brokers looking to capitalize on a thriving mortgage sector.
Jill Moellering, an Edmonton-based broker, team lead and trainer, said plenty of brokers who started in 2020 made easy money at first, but later struggled because they hadn’t built up their business strategy or learned about mortgage policies and products.
“Don’t give up if you’re new into the business,” she said. “Just put some work in and spend the time to hone your craft.”
Referrals are the best marketing you can hope for
When business slows, it’s easy to disappear down a rabbit hole of social media marketing, but the brokers agreed that flashy Facebook ads or TikTok posts don’t significantly drive their business.
In fact, Moellering says she doesn’t spend any money on advertising. All of her clients comes through word-of-mouth, or referral partners. “It doesn’t have to cost you anything to go build up that business,” she said.
Wilkins estimated that about 60% of his clients are repeat, and marketing to them specifically can be quite fruitful. “Mortgage brokers in general want the easiest path to the finish line, but we forget that our customers are sometimes our best champions,” he told the panel, “and it’s a lot easier to work within an existing client area.”
Brokers can’t just sit back and expect referrals to come automatically; building a referral network takes work.
In Moellering’s case, she spent time in Facebook community groups simply answering questions about homeownership.
Butler, somewhat tongue-in-cheek, had a much less strategically viable plan: “Go on TikTok and sweat. Serious,” he said, to laughter from the room. “It solved everything!”
Brokers face a choice: financial advisor or business-driven approach
Many mortgage brokers today see themselves as financial advisors capable of guiding clients through one of the biggest purchases they’ll ever make.
A half-hour spent on the phone when big financial news breaks can calm a worried customer, even if it doesn’t lead to any more money in the broker’s pocket that day. Most on the panel agreed that time spent with customers can reap rewards down the road.
“To me, the value in every interaction is creating referral sources,” said Larock. “Every morning, the phone rings. Sometimes, there’s business, and sometimes I’m just helping people.”
To Larock, helping clients understand their financial options is one of the best ways for brokers to retain clients. A well-informed client is more likely to return for future purchases and refer friends or family, driving long-term business growth.
However, staying fully informed on the latest economic news and trends comes with a price.
Butler, a longtime media commentator, said there’s nothing wrong with brokers deciding they don’t want to act as financial advisors to clients. He described these brokers as ‘technicians’ capable of getting the best deals possible for their clients.
Those that do, however, should expect to read about ’20 hours a week’ on top of their workload. “If you want to be this kind of a subject matter expert, you’ve got to spend some time reading and learning,” Butler said.
Don’t assume you know everything, but always be prepared when clients call
Falling interest rates present a dilemma for fixed-rate mortgage holders eager for a better deal: is it worth breaking their mortgage, switching to a variable rate, and paying the associated penalties?
Butler encouraged brokers to reach out to clients with rates in the 4% to 5% range who may have opportunities to lock in at lower rates, making sure to provide an honest assessment of the penalties and potential savings. “And there will be money made,” he said.
Larock, by contrast, cautioned the audience against persuading clients to switch to a variable-rate mortgage if they are better-suited to the stability of a fixed rate. “We can’t see around corners. We don’t know what the future is going to hold,” he told the panel. “We don’t want to project confidence when we have no right to it.”
Wilkins noted that brokers should be ready for these discussions, as the fixed vs. variable dilemma will be top of mind for many new buyers and those renewing in the coming years. He emphasized that while not everyone understands the potential costs of breaking a mortgage early—which can run into tens of thousands—some clients may still opt to proceed, chasing a lower rate.
“These hard conversations are going to be coming, you just wait,” he said.
Philippe Beland, a Quebec-based broker, pointed out that these hard conversations aren’t even all that new. “This is why you need to be very transparent when looking at 5-year fixed penalties,” he said. “In 2021, we did way too many variable mortgages, and we got into difficult discussions with clients.”
Don’t stress over tech—unless it’s holding you back
Brokers often hear they need the latest tools—from mortgage CRMs to private ChatGPT servers—to keep on top of their workload.
To Wilkins, the best technology a broker has is whatever they happen to be using. “I think you need to pick your path and be consistent,” he told the panel.
Spending all of your time testing the latest tools can quickly eat into the time you spend closing deals if you aren’t careful.
Moellering shared the story of a broker who tested five different CRM platforms, while only closing about 10 mortgage deals in the year. For her, the essentials are her phone and a submission platform. “Tech should be used to improve your world and actually take work off your plate,” she said.
Larock emphasized that it’s perfectly fine not to be the most tech-savvy broker. In fact, he believes technology can sometimes interfere with the personal touch that sets a broker apart.
“For me, the magic happens when I talk to my clients,” he said. “Any tech that prevents me from doing that, or reduces the amount of time I spend with my clients…is not happening.”
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Last modified: November 3, 2024