How mortgage brokers advise their clients on Bank of Canada decisions owner on guiding borrowers through difficult decisions over the last 16 months

How mortgage brokers advise their clients on Bank of Canada decisions

The aftermath of a Bank of Canada decision can be a hectic time for mortgage agents and brokers, with a rate increase usually accompanied by a flurry of calls from and outreach to clients wondering what the move might mean for their finances.

By contrast, the fallout from last week’s central bank announcement was comparatively serene, with the Bank deciding to hit pause on rate hikes in a move that spelled no change to borrowing costs.

Still, the buildup to that September 6 decision was keenly watched by proactive agents and brokers who readied clients for the announcement and prepared updates for release immediately after the decision became public, particularly for variable-rate customers who are most heavily impacted by the Bank’s rate announcements.

For Janna Dawdy (pictured top), owner of the brokerage in Kitchener, Ontario, keeping customers apprised of the implications of a central bank rate decision has long been an important part of the business.

“I always send out an email to my clientele prior to a rate announcement that we’re expecting it and we will update them, so I do have a drip with anybody who’s on a variable rate,” she told Canadian Mortgage Professional. “When rates don’t move, it’s a wonderful thing the next day.

“As soon as the announcement happens, we send out that communication to all of our variable clients and let them know that the Bank of Canada has stayed the same, and in that communication, we let them know that their payments will not change.”

Stepping up to the plate for clients during challenging times

With the central bank’s rate decisions over the past 16 months having seen its benchmark rate – which leads variable mortgage rates in Canada – spike by 475 basis points, it’s little surprise that many of those announcements have caused significant distress for brokers’ clients throughout that period.

During that spell, it’s been crucial to maintain clear and regular communication with clients around the time of Bank announcements, Dawdy said, to assuage their fears and fully explain the possible implications for their mortgage.

“On those announcement dates, certainly, we’re bombarded the next day,” she said. “If [rates have] increased, in that communication we let them know how it’s changed. We always put in a graph saying, ‘Don’t forget your discount [for instance] if you got prime minus one,’ or if you want to lock in, refinance, or look at your options.”

It’s during challenging economic environments such as the current one that the value of a personal, empathetic approach to clients comes into sharp focus, according to Dawdy, with the executive and her team putting in “hours of work” to ensure that service remains consistently excellent.

“I’m not the type of broker that says, ‘Here’s the 1-800 number,’” she said. “Prior to and then after the announcement, we’ll get them the details: ‘Here’s what your locked-in rate would be. Here’s what your new payments would be.’ That sort of thing.

“I send out multiple options. I blast out information to my clients and say, ‘Hey, if you’re feeling the heat, here’s an option that we can look at where your penalty now can be absorbed [and] we can reduce your rate.’ Anytime there’s an opportunity, that’s the only thing I’m really doing… trying to be sensitive to people’s budgets and [see if] there is any value that I can offer that might alleviate their monthly costs right now.”

Are clients gravitating towards virtual or in-person arrangements?

The prominence of in-person meetings plunged at the onset of the COVID-19 pandemic – and while public health restrictions have subsequently eased entirely, mortgage clients are still overwhelmingly choosing to conduct business either over the phone or by email, according to Dawdy.

“It’s definitely 99% virtual,” she said. “Even Zoom is few and far between. It’s a lot of email, and the initial phone call, of course, but even just for document review [clients] like to do that on their own and then filter the questions. We have a pretty streamlined process here – so for the most part, I think clients are getting the information that they need.

“I am seeing maybe one client a month in the office. There is the odd person that wants to come in – but for the most part, I think we’ve all gotten so used to [deciding], ‘We can get this done right here. Fifteen minutes on my device and we’re done.’”

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