Mortgage market | Non-traditional lenders are gaining ground

The tightening of financing conditions had the effect of favoring non-traditional lenders, which last year experienced higher growth in their mortgage volume than traditional mortgage lenders, confirms a new study.

“The market share of small lenders increased from 11% to 13.4% last year, writes JLR in its study entitled Quebec Mortgage Market Report 2022 and released on Wednesday.

These observations are in line with those made in the fall by the Canada Mortgage and Housing Corporation (CMHC). “Growth in mortgages from non-traditional lenders outpaces that of traditional lenders,” reads the report. Residential Mortgage Industry Report from CMHC, published in the fall.

“This unregulated segment of the industry has likely attracted a larger number of borrowers who have been unable to meet the eligibility criteria of a traditional lender in the context of rapidly rising interest rates” , explained at that time the CMHC.

Unlike the CMHC report, which paints a Canadian portrait of the mortgage market, the JLR study focuses on Quebec.

This Montreal real estate data firm monitors the mortgage deeds that are filed in the land register on a daily basis. JLR is thus equipped to estimate the market share of the main lenders in a market context marked by the rise in interest rates.

According to JLR, more than 266,000 mortgages were registered last year, 16% less than in 2021.

The number of loans is divided equally between mortgages related to the purchase of a residential or non-residential property and those related to renewal or refinancing.

The document published by JLR focuses on mortgage loans linked to the purchase of a property for methodological reasons.

Desjardins in the lead

Desjardins Group remains the market leader. JLR estimates its market share in the province as a whole at 40%. More popular in the regions, it still remains the number one lender in the Montreal metropolitan area with market shares of approximately 30%.

JLR’s calculations are based on the number of residential and non-residential mortgages, not dollar volume.

However, according to JLR, the main mortgage lenders are in order: Desjardins (40.3%), National Bank (13%), Royal Bank (10.2%), BMO (7.7%) and TD (6.6%). Among the main financial institutions, Laurentian brings up the rear. ” [Elle] remains a marginal lender with market shares below 1% for 5 years now,” JLR writes.

In the Montreal area, Desjardins remains in the lead (27.9%), followed by Royal (13.6%), National (12.5%), BMO (10.4%) and TD (8.9%). ).