For millions of Canadians, homeownership is one of life’s biggest milestones. In today’s economic climate of rising interest rates and affordability challenges, real estate professionals must go beyond just understanding mortgage basics—they need to interpret how these broader trends impact their clients’ decisions in real time.
Compared to the U.S., Canada’s mortgage industry—while restrictive—is uniquely structured to prioritize long-term stability. While there’s always room for modernization, our framework has historically shielded homeowners from the volatility that has plagued other markets.
That said, with growing interest in non-traditional lenders and fintech options, Realtors are now expected to help clients evaluate a more complex, evolving landscape that comes with new opportunities and risks.
A mortgage system built on stability
One of the defining strengths of Canada’s mortgage system is its conservative lending approach. Unlike markets where risky lending practices have triggered financial crises, Canadian banks and Federally Regulated Financial Institutions (FRFIs) operate under strict underwriting standards. Borrowers must demonstrate they can manage their mortgage obligations over the long term. This cautious approach was a key factor in shielding Canada from the mortgage meltdown that struck the U.S. during the 2008 financial crisis.
Another major difference lies in mortgage terms. While the U.S. market is dominated by 30-year fixed-rate mortgages, Canadian mortgages generally have shorter terms, most commonly five years or less. This system requires homeowners to renew their mortgages periodically. While this may seem like an inconvenience, it also allows homeowners to take advantage of lower rates when the market shifts. If rates continue on a downward trend, Canadians can refinance or renegotiate more favourable terms.
For Realtors, this means educating clients about the importance of renewal timing and preparing them in advance, especially in today’s climate where renewing at a higher rate could significantly impact affordability.
An evolving market with more choices
Canada’s mortgage market has traditionally been dominated by the major banks, with the landscape now evolving. In the U.S., non-deposit taking lenders account for over 70 per cent of mortgages, whereas in Canada, that number was closer to 20 per cent in 2023. As a result, Canadian borrowers have historically relied more on traditional financial institutions, which can limit options and flexibility. However, alternative lenders, digital platforms, credit unions, and mortgage brokers are increasingly offering more choices, enhancing competition and providing Canadians with access to a broader range of mortgage products.
With these new options come important tradeoffs. Real estate agents should be aware of the regulatory gaps, varying levels of consumer protection, and potential risks clients may face when working with less-established digital lenders. Privacy and data security are also key issues when applying through newer digital platforms.
Government-backed mortgage insurance, provided through the Canada Mortgage and Housing Corporation (CMHC), also plays a crucial role in supporting first-time homebuyers. With a down payment as low as five per cent, Canadians can enter the housing market without saving for a typical 20 per cent down payment. Safeguards such as the mortgage stress-test have contributed to consistently low default rates, ensuring that Canada’s housing market remains resilient even in challenging economic times.
As client curiosity about alternative lenders grows, real estate professionals should build strong partnerships with a range of mortgage advisors and brokers. This way, they can provide clear, informed recommendations tailored to their clients’ financial situations.
Is my client ready for a new mortgage solution?
While the U.S. mortgage industry has largely digitized, many Canadian borrowers still face long approval times, piles of paperwork, and manual income verification. Fortunately, this is changing. A new generation of fintech lenders is offering fully online mortgage applications, document uploads, and real-time approvals.
This shift isn’t one-size-fits-all. Realtors need to assess whether clients are ready for a fully digital experience or whether they may require a more traditional, high-touch approach. There’s a digital divide between younger, tech-savvy clients and others who are more comfortable with in-person services.
As more fintech companies enter the mortgage space, traditional banks will be pressured to modernize their offerings and compete more heavily on price. While this may benefit some buyers, it also introduces questions about regulatory oversight and long-term viability—areas where Realtors should stay informed and able to guide clients accordingly.
What’s next for Canadian mortgages?
While the Canadian mortgage system is built on stability and responsible lending, there is room for modernization to better serve today’s homebuyers, continuing the evolving role of the Realtor. Agents are no longer just helping clients find the right property, they’re also expected to offer guidance on financing, especially as borrowing becomes more complex.
This includes helping clients weigh tradeoffs between speed and support, between digital tools and personal service, and between traditional institutions and newer entrants. The growing diversity of mortgage options means Realtors must be ready to help clients adjust their expectations and even guide them out of their comfort zone towards better-suited solutions.
Increased competition among lenders could drive innovation, potentially lowering borrowing costs and providing Canadians with greater choice in securing the best mortgage terms. But, regulation and consumer protection will need to catch up. Realtors should be prepared to explain both the advantages and limitations of newer lending models and set realistic expectations around timelines and approvals.
Despite these challenges, Canada remains one of the safest and most stable places to secure a mortgage. With responsible lending practices, government safeguards, and a growing number of available options, Canadians now have more resources than ever to navigate their homeownership journey with confidence.
By staying ahead of these leading industry trends, Realtors can become even more valuable advisors, helping their clients stay prepped for the best home buying options in Canada’s evolving market.
Justin Herlick is the CEO and co-founder of Pine, Canada’s first all-in-one digital homeownership platform. A graduate of Queen’s University, Justin began his career in Silicon Valley, where he contributed to transformative startups like Blend and Instabase. Motivated by the challenges he faced navigating the mortgage process, he launched Pine to provide Canadians with a seamless and straightforward way to find, buy, and finance their homes.