Assisting brokers in meeting the needs of a changing market has been a big priority, executive says
A transactional approach may have dominated for many brokers amid the red-hot activity in Canada’s mortgage market in 2020 and 2021 – but a marked cooldown in purchase activity last year meant an advice-driven strategy quickly became the name of the game.
That was a trend keenly observed on the lending side, too. Helping brokers manage the transition was a key focus at Manulife Bank of Canada in 2022, according to vice president – sales, Lysa Fitzgerald (pictured), who told Canadian Mortgage Professional that the company had adjusted its approach to reflect the new reality facing the broker community.
Part of that involved shifting strategy towards Manulife One, an all-in-one mortgage product that Fitzgerald described as the “most flexible home financing solution on the market.” It also saw the company double down on giving brokers the tools required to provide clients with the best options in the shifting climate.
“With our experience working with financial advisors, we had a lot of material that we customized for our mortgage broker partners,” she said. “We also kept our fixed rates competitively priced to allow brokers to continue building tailored mortgages to their clients’ needs. They had both payment flexibility and some safety from rising rates with our fixed-term sub accounts.”
Manulife One, a re-advanceable mortgage and banking product, allows clients to combine a mortgage with bank accounts, income, short-term savings, and different debts.
It can offer an ideal solution, the company says, for borrowers who wish to refinance or transfer their mortgage with at least 20% equity, buy a new home with a down payment of 20% or above, simplify their finances, or find a more flexible solution than a traditional mortgage.
What’s in store for the year ahead?
After a turbulent year for the economy in 2022, brokers and their clients alike are already gearing up for what’s sure to be another eventful 12 months ahead, with much uncertainty surrounding the direction the market will take.
Interest rates are now significantly higher than the same time last year, with January 25 set to mark the date of the Bank of Canada’s first rate announcement of 2023 – and a possible further increase.
Expectations have solidified around a 25-point January increase after the latest Canada jobs report showed a stronger-than-anticipated labour market, indicating that the central bank’s efforts to cool the economy could be facing some stern challenges.
2023 market: RATESDOTCA Expert talks rising rates, appraisal challenges.
— RATESDOTCA (@ratesdotca) January 12, 2023
With high interest rates and a cooler housing market likely to continue well into this year, 2023 could prove a bumpy ride in Canada’s mortgage space.@CMPmagazine #ratesdotcahttps://t.co/rOgcl16lB1
In that rising-rate environment, Fitzgerald emphasized the value borrowers can find in a knowledgeable mortgage expert to help guide them through an ever-changing and volatile landscape.
“Based on what we’re hearing from the economists and market experts, we think rates will stabilize but not decrease during 2023, so people will need to reassess their affordability in the new normal,” she said. “That’s why we think working with a professional mortgage broker gives Canadians the best chance of understanding what their options are.”
Find out these things to look for when connecting with a good mortgage broker professional.
What’s Manulife’s focus on the mortgage front this year?
Cashflow and planning will be a big focus for Manulife in 2023, Fitzgerald said, to help borrowers identify the solutions that best fit their financial needs and goals.
That’s especially relevant with variable rates, which saw a surge in popularity after the Bank of Canada slashed its trendsetting rate in 2020, ticking significantly higher after a series of big rate hikes throughout last year.
“We want Canadians to be intentional with their home financing,” she said. “One big trend for next year will be the need for brokers to seek payment flexibility for their clients as mortgages renew and homeowners are faced with much higher interest rates.
“This is where our Manulife One account can really help clients adjust to the new interest rate environment and get the payment flexibility they need to address rising costs and prolonged inflation.”
Working with Manulife gives brokers access to a product that none of Canada’s top five banks have, Fitzgerald said, and one that allows clients to manage their money in an effective and responsible way. “It is a market differentiator for them, and also a smarter way for clients to use their paycheques,” she said.
As brokers and agents, what are you looking for from lenders in 2023 to help navigate this year’s complex mortgage market? Let us know in the comments section below.
