Online options popular in mortgage hunt: report

Canadians are turning increasingly to online resources in managing their mortgages and other finances, according to a new report.

RateHub.ca, an online service for the comparison of financial services, surveys Canadians’ use of financial technology in its inaugural Digital Money Trends Report. The report, available at RateHub.ca, focuses on mortgages, credit cards, and savings and investments.

The report’s findings “speak to the importance of comparison shopping and realizing that there are options out there,” says RateHub.ca founder Alyssa Furtado. She says younger consumers in particular expect online access to transparent information and the ability “to compare products side by side.”

On the mortgage front, the report says Canadians begin their mortgage research early in the home shopping process and do so online. For example, we search for online mortgage calculators 487,000 times a month, and Bank of Canada interest announcements ignite a surge in mortgage rate searches.

Comparison shopping for mortgages — clearly faster and more inclusive online than tromping from bank to bank — can save money.

For instance, the report says that based on a mortgage of $500,000 amortized over 25 years, the difference between posted and discount rates amounts to $53,089 in interest payments over a fiveyear term.

The report also finds the use of mobile apps to search out mortgage information at RateHub.ca grew to 37 per cent in 2015 from 25 per cent in 2013. Usage is expected to continue growing.

As well, we search for mortgage information from banks far more than we do from brokers.

“It speaks to the fact that banks have such large brand recognition,” says Furtado, adding that mortgage shoppers should include brokers who may be able to get a better rate.

Canadians love their credit cards, according to the report. Respondents have an average of 2.4 cards and almost one-third charge 75 per cent or more of their monthly purchases. With monitoring agency TransUnion reporting Canadian credit card debt in the third quarter of 2015 hitting a two-year high of $3,745, our credit use may need a re-think.

Furtado says that if you’re carrying credit card debt at a high interest rate while also saving money at a low return, you’d be better off paying down your debt and then saving.

The report also notes that most respondents have a bank credit card with their primary financial institution. An online search could yield a better deal, whether on interest rates or rewards.

When it comes to savings and investing, we search less for savingsrelated information than for mortgage and credit card data, perhaps an indication of our priorities. Tax shelters like TFSAs, RRSPs, and RESPs are popular online searches.

On investment strategy, women favour bonds, mutual funds and GICs, while men are more likely to invest in stocks and ETFs, a type of traded investment fund.

And while portfolio self-management is popular, the new world of online investment providers — socalled robo-advisers — like Wealthsimple and Wealthbar have so far attracted only two per cent of survey respondents.

The report reveals other facts about Canadians’ spending and saving habits in the digital age. However, Furtado cautions that because information changes so quickly, consumers should verify with a live representative all the details of online offers.

“Online doesn’t replace the need to speak to financial experts,” she says, “but it does empower you.”