How new mortgage brokers are overcoming the challenges of today’s high-rate environment

It’s no secret that the current high-rate environment has been challenging for mortgage borrowers and mortgage professionals alike. That’s especially true for those who are just starting their career as a broker.

If the Bank of Canada holds rates this week as is widely expected, it will mark the sixth consecutive month that the benchmark lending rate has been at a 22-year high of 5.00%.

And while the market focus has shifted towards the timing of the Bank’s first rate cut, the latest forecasts suggest material rate relief won’t be arriving until later in the year.

To learn more about how new brokers are navigating the current market, we reached out to Tammy Poirier, Manager of Broker Development at TMG the Mortgage Group, who heads training programs for new brokers.

Ultimately, both new and experienced brokers have more in common right now than they may realize, Poirier says.

“We all struggle with the same thing and that’s getting our clients qualified,” she says. “As a new broker starting out trying to build their business and navigate this high interest rate minefield, it’s just a matter of the more people you talk to, the more people you get in front of, it’s all a numbers game.”

The current market conditions have meant new borrowers are facing increased challenges when it comes to qualifying for their mortgage. This is especially true when taking into account the mortgage stress tests they face, which means they must qualify at a rate of two percentage points on top of their contract rate.

But Poirier emphasizes the importance of building and maintaining relationships with potential clients, including those who aren’t able to qualify in this current rate environment.

“Not everybody is going to be able to qualify at this point in time,” she said.

“But it’s about reaching out to them and keeping in touch with them. Maybe they don’t qualify now, but in three, four or five months, if the rates drop, they will qualify,” she adds. “So it’s important to keep top of mind and stay in touch with them.”

The role of social media and client engagement

And now, staying in touch and engaging with clients has never been easier thanks to social media, says Jesse Mallery, a New Brunswick-based mortgage broker.

“I find that people tend to be a bit hesitant to reach out via social media because they’re afraid of the process or they’re afraid that they may not be quite ready,” he told CMT.

“I’ve really focused on pushing myself on social media just to educate people and explain to them that I’m here throughout the full process,” he continued. “Even if you’re not ready to purchase right away, or if you’re not sure that you’re going to be getting a mortgage say in two or three months, we can still work together to get you set up to be able to do that in the future.”

For Mallery, this strategy has become a way to foster more long-term relationships with clients. “Once they see that I’m in it for the long haul with them, then I’ll start getting messages, emails, calls and then next thing you know, someone might be ready sooner than they ever anticipated and that turns into business for me,” he said.

Early career experiences and future prospects

British Columbia-based broker Tara Rayner, who recently made the career change to becoming a broker, says business has been slower than she expected, but that she’s been using this period as an opportunity to better understand the mortgage market cycles.

“I didn’t have a benchmark before, I didn’t know the industry before the higher interest rates,” she explained. “It’s been slower than I anticipated when I decided to make the career change, but I’m still really loving the work itself and really enjoying helping people.”

She adds that the one benefit of starting a career as a broker in a high-rate environment is that realtors are generally less busy, making it easier to take advantage of networking opportunities.

“There’s more time to make those relationships,” she said.

A good learning opportunity

For new brokers starting out in this market, Poirier says the experience they are gaining in these challenging conditions is invaluable for making them better brokers and contributing to business longevity.

“Over the last few years, it’s been super easy to have a successful business because business was falling in our lap,” she explained. “Those who are starting out today, if they’re able to succeed in an environment like this—and they’re doing what they need to do to build their business successfully—when things start getting easier and rates drop, they’ll just do that much better.”

Reflecting on lessons she learned during her time in the industry so far, Rayner encourages other brokers to learn as much as they can with the multitude of resources that are available to them.

“It’s an incredibly collaborative environment and industry, more so than I was expecting,” she admits. “I thought it would be a bit more competitive, but it’s been really collaborative.”

She recommends brokers take advantage of the webinars, training sessions and symposiums, many of which are offered by Mortgage Professionals Canada.

“Be a sponge and take it all in,” she recommends.