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decoding the mortgage market

1. More mortgage restrictions to come
With Ottawa paring down its mortgage exposure, the Bank of Canada estimating up to 30 per cent overvaluation in Canada's housing market, over-indebted consumers and average home prices incessantly breaking records, policy makers will restrict the mortgage market yet again. New limits on government-backed mortgage funding will make it more expensive for lenders to fund mortgages, or new underwriting rules will make it harder to qualify for a mortgage. Maybe both.

2. Record discounts for variable mortgage rates
Lenders' funding costs should continue to improve for variable-rate mortgages in the next twelve months. As a result, we'll see a small number of lenders and/or brokers advertising discounts better than prime minus one per cent before the end of 2015.

3. Brokers will break into three camps
Mortgage brokers will split into three camps in 2015: Full-service brokers who create detailed mortgage plans to support one's financial goals, online mortgage brokers who provide less advice for a lower rate, and your run-of-the-mill everyday broker. That latter type will suffer job losses in 2015 as their rates and service offerings prove uncompetitive relative to other brokers, banks and credit unions.

4. A glut of private money
Alternative mortgage lenders – such as mortgage investment corporations (MICs) – will grow flush with cash, as investors chase higher yields and as Ottawa's stricter mortgage rules create opportunity for them. That abundance of capital will motivate sub-prime lenders to take more risk in search of higher returns. In turn, we'll see some of them offer mortgages with only 10 or 15 per cent down, instead of the traditional 20 to 25 per cent equity The result: Credit-challenged consumers will have more lending options at lower interest rates.

5. Brokers will pitch you other stuff
Don't be surprised if your mortgage broker offers you other financial products. Declining margins will motivate many brokers to diversify their revenue streams. They'll take a page from banks' playbooks and cross-sell you everything from GICs, to insurance, to credit cards, to RRSPs.

Robert McLister is a mortgage planner at intelliMortgage Inc. and founder of