How Quebec’s Mortgage Market Differs from the Rest of the Country

November 27, 2019MortgagesNo Comments »

Quebec has always been the exception to many rules. Quebec has become the exception to Canada’s wild real estate market. Vancouver and Toronto saw 10 to 20 percent annual price increases for the average home before the Bank of Canada passed laws to cool down these housing markets. Alberta’s real estate market has spiked and crashed in line with oil prices several times over the past ten years.

The Rules Regarding Referrals

Quebec is unique in allowing mortgage lenders to trade basis points for referrals with mortgage brokers. This means the mortgage broker Brossard firm you chose may be paid with a referral fee from the mortgage lender that’s a percentage of the mortgage balance. The alternative would be you paying them a modest flat fee or percentage of the home loan out of your own pocket.
An interesting quirk of Quebec’s mortgage market is that realtors can receive that fee for referring mortgage customers to a bank. This means your Quebec mortgage broker is competing with your realtor for your business. This also results in the mortgage broker having to offer greater service, better rates or niche services to remain in business.
On the other hand, this rule resulted in the rise of road reps who simply promote loans from specific banks, though customers may mistake them for mortgage brokers who can offer a wide array of loan products. Road reps may refer clients to a mortgage broker, but then the mortgage broker has to split their fee with the road rep. Go ahead and ask what mortgage broker Dorval residents would recommend, because you want to know all of your options before you make the biggest purchase of your life.

Credit Unions and Caisse Populaires

Caisse populaires are similar to credit unions in that they are member-owned, locally focused and non-profit. They differ in a few other ways such as the services they provide; they may offer insurance, investment products and savings accounts. However, both offer business loans and home loans. This results in a much larger, non-profit mortgage sector than is found in other parts of Canada. However, big banks remain the largest source of mortgage financing in the province. Banks are the better choice if you need a higher level of funding. Banks may fund the mortgage for a million dollar property or the purchase of several investment condos, while alternative lenders will focus on mortgages for a single family home.

The Limited Selection of Financial Institutions

Quebec’s rather closed financial system means there are fewer big banks for mortgage brokers to work with. They may or may not work with credit unions and caisse populaires. It results in a larger share of loans being issued by investors and non-traditional lenders. Note that mortgage brokers may work with mortgage lenders in other provinces so that they can offer a wider array of products and services for their customers. If you want to work with non-traditional lenders, seek references for the best mortgage broker Brossard residents can recommend.

The Different Property Market

Montreal is the second largest real estate market in the country. And it is seeing a condo building boom. However, it is unusual in the sheer number of townhomes, row houses and other forms of multi-family housing. This resulted in lower average property prices in Montreal as well as a much larger share of the population renting. This meant that Quebec’s real estate market is much more stable than the rest of Canada’s.

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