An examination of the Canadian mortgage broker industry
LE3 .A278 2010
2010
VanBlarcom, Brian
Acadia University
Bachelor of Arts
Honours
Economics
This thesis seeks to answer the question “ why are mortgage brokers relatively under used in Canada and what could be gained from increasing their usage?” Through examination of the current market, mortgage brokers were found to be impeded by a combination of the following factors: broker inexperience, a history of fraud, the major bank’s dominance of advertising and consumer opinion, and the established status quo bias amongst Canadians. A third degree price discrimination model was subsequently used to estimate the consumer cost of these impediments. The consumer surplus cost was calculated to be $ 41.2 million in 2009. Individually, consumers can benefit from the use of mortgage brokers but the mortgage industry as a whole benefits from the decrease in dead weight loss, calculated to be $ 15.89 million. It is the existence of these savings that will likely encourage growth in this industry in the future.
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https://scholar.acadiau.ca/islandora/object/theses:754