Buying Power

When Joe Lai and his wife Lisa decided to buy a

brand new condominium, they decided to go

online for information about mortgages. "The

developers have their own deals with certain banks and then

they have their rates," he says. "I just went online to

compare to see if the rates were competitive."

He wasn't alone. According to a November survey by the

Canada Mortgage and Housing Corporation, 48 per cent

- or nearly one half - of homebuyers use the Internet for

mortgage-related information. That's up considerably

from 26 per cent in 1999.

"We see a decreasing trend in consulting competitive

lenders for information and an increasing trend in using the

Internet," says Jean-Francois Billardon, a market research

specialist with the CMHC.

The national housing agency found that people prefer to

go online to become more informed about all the options

available, to try and compare what's out there and what

would better fit their needs.

Billardon says consumers probably find the Internet less time-consuming and more efficient than going to

different branches or calling potential lenders. "The other

probable reason is an increasing use of the Internet in

general for information on major consumer decisions."

The most dominant websites that consumers used

when looking for information belonged to financial

institutions and lenders. Billardon says real estate sites

and the CMHC site were also visited.

"The reason I liked going online was because they had

mortgage calculators," says the 29-year-old Lai. It allowed

him to determine how much he would have to pay

weekly, biweekly, or monthly. He was able to change the

rates depending on different scenarios. "I think those tools

are quite useful. It gives you an idea of what kind of rate

you should be able to take on."

Among first-time buyers, 51 per cent said they went

online to look for mortgage information. While increasing

slowly among renewers, Internet use now stands at 31 per

cent, up seven percentage points from 1999.

Billardon says there are a couple explanations for why

this is the case. "If you look at the demographics of

first-time buyers versus renewers, renewers tend to be

much older on average."

In addition, renewals are a fairly automatic process for

many people and it doesn't require a lot of research. Also,

first-time buyers tend to rely more on independent

sources of information whereas renewers look to their

current lending institution.

Not surprisingly, use of the Internet is much more

common among younger consumers. Among those aged

24 to 35 years, 55 per cent used the Internet for mortgage

information. In comparison, just 25 per cent of those 55

years and older went online.

"The bulk of first-time buyers are in the 25 to 35 age

bracket," Billardon explains. "That's also where you see

the highest use of the Internet for mortgage purposes, but

that's also true for other uses of the Internet."

Lai is pleased with what's available online. The

Osgoode Hall Law School student likes the fact he's able

to find the information he's looking for whenever he

wants. He also says the Internet offers more up-to-date

mortgage rates.

"It has definitely kept me in the loop, whether what I'm

being told is a good deal or not," Lai says. "It gives me

more confidence in terms of having me reach a conclusion

as to whether I'm going to commit with someone or not."

If you don't believe us...

According to our friends at Scotiabank, the

proof is in the numbers. Since first launching

www.scotiabank.com in 1996, usage has

risen from 240,000 visits per month to more

than 3.5 million visits per month. The site's

actual mortgage calculator had more than

750,000 visitors in 2004 alone.

Here are some other handy links to get you started on your

mortgage search:

bmo.com

cibc.com

cmhc.ca

finance.sympatico.msn.ca

ingdirect.ca

nbc.ca

pcfinancial.ca

royalbank.ca

td.com