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
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 were 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.
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
.
“At most other financial institutions, you need to talk to an adviser before seeing an estimate,” Avenia explains.
What about the rates?
This has long been the wall banks keep running into.
Scotiabank’s automated
mortgage started out in 2019 with great promise. Its rates were among the best in Canada.
Then the bank apparently decided it didn’t want to cannibalize its other sales channels, so it let the platform wither with uncompetitive offerings.
With its digital switch tool, CIBC is starting out strong as well.
The example I was given included a 4.29 per cent three-year fixed rate, just 10 basis points above the lowest national advertised uninsured rate, and well below every other big bank’s advertised rates. (Rates change all the time and depend on your qualifications, assets, etc., so your mileage may vary.)
On top of that, like most banks, CIBC offers a cash incentive for switching — from $1,000 to $5,500 depending on your mortgage size.
That’s equivalent to another 17 basis points off the rate on a three-year $300,000 mortgage.
From there, customers can contact a mortgage adviser to negotiate further or get some advice.
Client assets, credit and depth of relationship potential all factor into what rate the bank can offer, Avenia says. “Someone who is very credit heavy might not be in the lowest rate bracket,” she adds.
The race for the killer app
CIBC’s first effort is respectable, but like most
online mortgage experiences
, it still has a ways to go before I’d call it world class.
At least six things could make it better and boost its long-term uptake.
1. Consistently competitive rates:
It’s too early to tell how consistent CIBC will be, but this single factor is the Achilles heel of all big bank digital mortgages. Customers aren’t fools. They can comparison shop online in minutes.
And AI will only make that easier
. As a result, banks that try to protect their legacy sales channels with crappy online rates will pay the price long-term.
2. One-click refinances:
After the loan estimate, existing bank customers with verifiable income should be able to apply in one click. (Mind you, the bank already has one-click renewals for existing mortgagors approaching maturity.)
3. AI voice chat advisers:
Imagine a digital mortgage expert that talks like a real adviser, knows more than 1,000 human advisers combined, and walks you through term selection based on your five-year plan, qualifications, risk tolerance, income stability, liquidity needs, the market-implied rate outlook, yield curve and more.
4. One-click chat access:
Every lender in Canada should already be offering instant access to expert mortgage advisers through live chat.
5. An automated property-value estimate:
Knowing roughly what your home is worth helps quantify refinance potential more easily. Automated valuations could be subject to a full appraisal, allowing for a higher loan amount if needed.
6. Custom bundle rates:
Clients should have a simple, streamlined way to signal which assets they’d move over or which additional products interest them in exchange for a lower rate. (Banks don’t just want your mortgage — the anchor product. They’re obsessed with “depth of wallet,” and “cross-selling” helps them offer lower mortgage rates.)
Every bank could have shipped these features years ago. Most have deliberately chosen not to provide such options to Canadian borrowers.
Regardless, there’s plenty to admire in CIBC’s new online offering. Hopefully, its team knows what’s at stake if it fumbles digital mortgages the way Scotiabank fumbled eHOME.
Of course, rival lenders and mortgage brokers won’t be napping on digital adoption. They’ll be working on their own killer apps, including some that compare multiple lenders’ products, not just one brand’s. So CIBC and its peers have plenty of work ahead.
Robert McLister
is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
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