There's plenty to admire in CIBC's new online mortgage shopping offering. Hopefully, its team knows what's at stake if it fumbles digital mortgages the way Scotiabank fumbled eHOME.
Are Canadians Ready for DIY Mortgages?
Our banks have been incredibly slow to join the do-it-yourself mortgage movement. Every lender in the country has the technology to deliver fast, cheap, fully automated mortgages online. But they choose not to. That's why CIBC's new digital switch tool caught my eye. I wanted to test its claim that it makes switching mortgages easier, but it also raised a much bigger question: Are Canadians ready for DIY mortgages?
Today, a single click can buy 100,000 shares of stock, a website can issue a seven-figure insurance policy, and a multi-million-dollar business can get incorporated online — all sans human. Yet three decades after the internet went mainstream, securing a competitive bank mortgage still requires a conversation with an actual breathing creature.
“There's always been a debate over whether clients wanted to do everything online,” says Lisa Avenia, CIBC’s VP of real estate secured lending. “Now we're starting to see research that more mortgage clients want digital solutions.”
So far, however, Canada’s fourth biggest lender has been taking baby steps with online mortgages — which, if you think about it, is really slow, because babies are terrible at walking.
Why Automation Is Delayed
Part of the delay on automation is due to the same reason making the rounds at other banks. CIBC is simply not yet seeing “a lot of demand” for “full end-to-end” digital mortgages, Avenia says. It’s likely just a matter of time, as our comfort level with instant-AI answers grows by the year. For the moment, though, research indicates most Canadians still want a human voice in the room, or at least on the phone or video conference, before finalizing their application.
Part of it is distrust in bot-generated mortgage recommendations because of AI hallucinations, less personalization, a lack of accountability and perceptions of stale data and biases.
But here’s the thing. While CIBC data shows 48 per cent of borrowers need assistance from a mortgage adviser when renewing, a recent Cotality poll said that only 30 per cent of Canadians would pay extra for a human expert to double-check AI’s mortgage or real estate recommendations.
How CIBC’s Switch Quoter Works
After a short online application and a soft pull on their credit bureau (which doesn’t ding your score), a customer instantly receives an “exclusive digital rate” offer by email — no phone call or branch visit required.
“Before this, a client might have started by going into a banking centre or contacting a mortgage adviser,” Avenia says. If the offer looks appealing, customers can lock in the rate for five days, giving themselves time to complete the full application. Since you aren’t obligated to follow through, CIBC’s rate hold serves as a handy insurance policy if you’re in a rush to lock something in because rates are going up.
