Homeownership is a Win-Win for Credit Unions and Members

May 2025

Homeownership is an exciting step for members looking to buy, and it can be a win for credit unions too. When credit unions offer mortgage services, there are a number of benefits for both members and lenders.

How do mortgage services benefit credit unions?

Opportunities for growth

The vast majority of mortgages are held by independent mortgage companies, with traditional banks coming in second as lenders. Data from 2023 shows that credit unions hold only 14% of all mortgages. In 2022, credit unions held only 10% of mortgages in markets where smaller mortgage loans are more prevalent, such as rural areas or less populated areas of the midwest. Based on the stats, there’s plenty of room for credit unions to grow and capture a larger percentage of buyers, particularly in the small mortgage market.

Key Takeaway:

There’s room to grow! Credit unions hold only 14% of all mortgages and only 10% of small mortgages.

Customer Retention

Independent Mortgage companies can’t offer portfolio products, but credit unions offer many other products to members and can hold onto more of their business. This is a significant advantage, as research shows that customers who apply for a mortgage are 2-3 times more likely to also seek auto loans or credit cards.

Credit unions have an advantage when it comes to retaining customers because we’re able to offer them more options to suit their needs beyond home ownership. Need more convincing? Companies are 60% to 70% more likely to sell to an existing customer, whereas the likelihood of selling to a new customer is 5% to 20%. Additionally, it can cost up to 25x more to acquire a new customer than it costs to keep an existing customer.

Key Takeaway:

Customer retention is important for long-term success.

Deep Relationships

Developing a deep relationship with members is a win-win for both the member and the credit union. Members who apply for a mortgage and seek additional products can have a long-lasting and deeper relationship with their credit union than a customer may have with an independent mortgage lender or bank. Other mortgage lenders may sell off their mortgages to large investors, but credit unions typically keep more of the mortgages that originate with them. This creates an ongoing relationship with members that is beneficial to everyone without involving an outside lender.

How do credit union mortgages benefit members?

When members hold a mortgage with their credit union, they also have advantages that stem from the deep relationship they’ve built together. According to a report by Bankrate, 82% of Americans believe owning a home is part of the American Dream. Credit unions have the potential to help members make their dreams come true.

Here’s how.

Accessible Opportunities

In the same Bankrate survey, 64% of Americans are willing to take action to find more affordable housing—even if it means downsizing, moving out of state, or taking on roommates. Nearly half of Americans (46%) say the inability to afford a down payment or closing costs is the biggest barrier to buying a home. Credit unions can provide more accessible opportunities by increasing personalized services and focusing on impacting local communities.

Personalized Service

Because credit unions typically hold onto their members’ mortgages and don’t sell them off to large investors, they have more flexibility when it comes to what they can offer their members seeking a mortgage. Mortgage services and offerings can be tailored to a member’s individual needs if they don’t have to adhere to the same specific lending guidelines as large investors. A credit union may also be able to offer more options for loans and refinancing down the road.

In a recent article, Kathy Chartier CEO of Members Credit Union says, “By addressing our member’s needs with personalized products and exceptional service, we’ve built trust that generates member referrals and fosters long-term relationships.” This is a win for members and credit unions alike.

Key Takeaway:

Flexible and personalized lending builds trust and long term relationships.

Local Impact

Members receive more than personalized benefits from working with a credit union for their mortgage needs. As a nonprofit organization, a credit union is able to pass savings down to their members. Members are shareholders, and usually live and work in the same area as the credit union. Credit unions reinvest in their members and this can lead to more profits staying local. This has a trickle down effect in a member’s community, which is great for members who are homeowners.

Key Takeaway:

Credit unions impact the local community benefiting members.

The benefits to offering mortgage services leading to homeownership can have a positive impact on credit unions, members, and the community at large.

Are you thinking of offering mortgage products, but unsure how to market them? Check out our article “4 Tips To Build Trust and Provide Value When Marketing Mortgage Products” for more helpful information.

Member Advantage Mortgage helps make credit unions the hero of their members’ homeownership journey, regardless of their size. We think the best place to start is by listening. Let’s start with a confidential conversation; just reach out to me and we’ll be in touch shortly.

Jim Mitchell
(616) 466-7793
[email protected]

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Disclaimer:

This information is solely for credit union and mortgage professionals and should not be distributed or provided to consumers or the general public.

This is not an offer for extension of credit nor a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. Certain restrictions may apply. All approvals subject to underwriting guidelines. Not all applicants will qualify. Member Advantage Mortgage, LLC is an Equal Housing Lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.

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