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Broker share hits 48% among first-time buyers as complexity overtakes rate shopping
A 27-year-old project manager in Brampton spent three weeks trying to get pre-approved at the bank where she'd held an account since high school. The online portal asked for documents she didn't have. The branch referred her to a call center. The call center scheduled an appointment two weeks out. By the time someone explained why her freelance side income didn't count under OSFI's B-20 stress test, she'd already closed with a broker who had her approved in four days through a credit union she'd never heard of.
That pattern repeated often enough in 2025 to move a number that had been creeping upward for years. Mortgage brokers now handle 38% of all mortgage originations in Canada, according to Mortgage Professionals Canada's annual market report. Among recent first-time buyers, the figure is 48%.
The shift isn't happening because brokers are finding materially lower rates. In a market where the Big Five banks all price within 15 basis points of each other and advertise aggressively, rate arbitrage explains less than it used to. What's driving the move is that the mortgage system has become structurally harder to navigate without an intermediary who already knows the map.
Why the qualifying hurdle rose faster than prices
The stress test, currently set at the contract rate plus 2% or 5.25%, whichever is higher, means that a borrower approved for a $500,000 mortgage is actually being underwritten as if they were paying interest on $650,000. For the self-employed, newcomers without a two-year Canadian credit file, or anyone with income that doesn't show up cleanly on a T4, that gap becomes a wall. Banks handle these cases with templated decision trees. Brokers route them to one of the 40+ lenders whose underwriting criteria treat the same income differently.
A borrower doesn't know which lender treats commission income as stable after one year versus two. A broker does. The value proposition has shifted from "I'll save you 10 basis points" to "I'll get you approved."
The complexity isn't only regulatory. The mortgage product itself has fragmented. Cashback offers, portability clauses, prepayment privileges that vary from 10% to 25% annually, penalty structures that calculate differently depending on whether the lender uses a posted rate or a discounted rate as the benchmark, these are not details a first-time buyer in Winnipeg is equipped to parse while also comparing five-year fixed versus variable. Brokers absorb that parsing as table stakes.
The geography of the shift
Ontario and British Columbia have historically led in broker adoption, with usage rates near 50% in some Metro Vancouver suburbs. The 2025 data shows the gap closing. Alberta, Saskatchewan, and Manitoba all posted year-over-year increases in broker market share, particularly in mid-sized cities where branch networks have thinned and digital-only bank apps haven't filled the advisory gap.
The Prairie growth is notable because it tracks with the expansion of B-lenders and private funds into those markets. A borrower in Regina who doesn't qualify at TD but would qualify at a provincially regulated credit union or an alternative lender has no way to access that lender directly. The broker is the only pipe.
What the banks are losing
The 48% figure for first-time buyers is the sharper data point. It suggests that the "open your first account at 16, get your mortgage there at 28" lifecycle the banks built their retail strategy around no longer holds. Young buyers are treating the mortgage as a standalone transaction, not as an extension of an existing banking relationship. They are optimizing for approval certainty and comprehensibility, and they are finding both outside the institutions their parents used.
Retention teams at the Big Five are responding with automated renewal offers and rate-match guarantees, but retention is a different problem than acquisition. Once a borrower closes their first mortgage with a broker, the odds they return to a broker at renewal rise significantly. The habit forms around where the explanation happened, not where the account sits.
A 27-year-old project manager in Brampton spent three weeks trying to get pre-approved at the bank where she'd held an account since high school. The online portal asked for documents she didn't have. The branch referred her to a call center. The call center scheduled an appointment two weeks out. By the time someone explained why her freelance side income didn't count under OSFI's B-20 stress test, she'd already closed with a broker who had her approved in four days through a credit union she'd never heard of.
That pattern repeated often enough in 2025 to move a number that had been creeping upward for years. Mortgage brokers now handle 38% of all mortgage originations in Canada, according to Mortgage Professionals Canada's annual market report. Among recent first-time buyers, the figure is 48%.
The shift isn't happening because brokers are finding materially lower rates. In a market where the Big Five banks all price within 15 basis points of each other and advertise aggressively, rate arbitrage explains less than it used to. What's driving the move is that the mortgage system has become structurally harder to navigate without an intermediary who already knows the map.
Why the qualifying hurdle rose faster than prices
The stress test, currently set at the contract rate plus 2% or 5.25%, whichever is higher, means that a borrower approved for a $500,000 mortgage is actually being underwritten as if they were paying interest on $650,000. For the self-employed, newcomers without a two-year Canadian credit file, or anyone with income that doesn't show up cleanly on a T4, that gap becomes a wall. Banks handle these cases with templated decision trees. Brokers route them to one of the 40+ lenders whose underwriting criteria treat the same income differently.
A borrower doesn't know which lender treats commission income as stable after one year versus two. A broker does. The value proposition has shifted from "I'll save you 10 basis points" to "I'll get you approved."
The complexity isn't only regulatory. The mortgage product itself has fragmented. Cashback offers, portability clauses, prepayment privileges that vary from 10% to 25% annually, penalty structures that calculate differently depending on whether the lender uses a posted rate or a discounted rate as the benchmark, these are not details a first-time buyer in Winnipeg is equipped to parse while also comparing five-year fixed versus variable. Brokers absorb that parsing as table stakes.
The geography of the shift
Ontario and British Columbia have historically led in broker adoption, with usage rates near 50% in some Metro Vancouver suburbs. The 2025 data shows the gap closing. Alberta, Saskatchewan, and Manitoba all posted year-over-year increases in broker market share, particularly in mid-sized cities where branch networks have thinned and digital-only bank apps haven't filled the advisory gap.
The Prairie growth is notable because it tracks with the expansion of B-lenders and private funds into those markets. A borrower in Regina who doesn't qualify at TD but would qualify at a provincially regulated credit union or an alternative lender has no way to access that lender directly. The broker is the only pipe.
What the banks are losing
The 48% figure for first-time buyers is the sharper data point. It suggests that the "open your first account at 16, get your mortgage there at 28" lifecycle the banks built their retail strategy around no longer holds. Young buyers are treating the mortgage as a standalone transaction, not as an extension of an existing banking relationship. They are optimizing for approval certainty and comprehensibility, and they are finding both outside the institutions their parents used.
Retention teams at the Big Five are responding with automated renewal offers and rate-match guarantees, but retention is a different problem than acquisition. Once a borrower closes their first mortgage with a broker, the odds they return to a broker at renewal rise significantly. The habit forms around where the explanation happened, not where the account sits.
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