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Canadian Lenders Report

Q1 2026
Confidential – For Recipient's Use Only.

Executive Summary:

Canadian Lending Landscape

This report provides a comprehensive overview of the Canadian lending sector for the first quarter of 2026, with a primary focus on Real Estate Secured Lending (RESL) across banks and credit unions.

1. Market Scale and Growth in Loans

  • Global Loan Dominance: RBC and TD continue to lead the market, managing massive global loan portfolios of $1.06 trillion and $989 billion, respectively.
  • Canadian RESL Market Share: RBC holds the dominant position inside Canada with an 18.4% market share ($495.8 billion), followed closely by TD at 15.5% ($418.4 billion). Other major players include Scotiabank (12.5%), CIBC (10.9%), and BMO (8.0%).
  • High-Growth Institutions: National Bank saw an 18% annual growth in Canadian RESL, bolstered by its Canadian Western Bank acquisition. Desjardins followed, growing its portfolio by 10.5%.

2. Residential Mortgage Trends

  • Origination & Channels: Based on CMHC and Statistics Canada data, total Canadian residential mortgage originations reached $220.9 billion for the July-September 2025 period. Chartered banks remain the dominant force, holding a 70% market share ($154.5 billion). Our primary data indicates that 59.5% of borrowers finalized their mortgages directly with lenders, compared to 40.5% via brokers.
  • Variable Rate Shift: Based on Statistics Canada data, borrower preferences have shifted toward variable-rate mortgages, which surged to 45.1% of new bank originations by December 2025, up from 28.8% a year prior. However, our borrower-weighted primary data suggests fixed rates (71%) still dominate among individual survey respondents.
  • Insured vs. Uninsured: Uninsured residential mortgage balances reached $1.25 trillion at chartered banks, significantly outpacing the shrinking insured market ($376 billion). Across the Big 7, 79% of outstanding mortgage balances are now uninsured, up from 48% a decade ago.
  • Mortgage Default Insurers: Within the insured segment, CMHC commands 59% of the insurance-in-force market share, followed by Sagen (24.1%) and Canada Guaranty (16.9%). Mortgage default insurers remain highly profitable, with CMHC collecting $2.9 billion in premiums and fees in 2025 while paying out minimal claims.
  • Amortization & Renewals: A dominant 70% of Big 6 banks plus Desjardins' mortgages have amortizations of 25 years or less, and negative amortization has been nearly eliminated (0.01%). A wave of renewals is imminent, with 25.3% of outstanding residential mortgages scheduled to mature within one year.
  • LTV Ratios: The average Loan-to-Value (LTV) for uninsured RESL portfolios across the Big 6 stands at 57%.

3. The Non-Bank Sector: MFCs and MIEs

  • Mortgage Finance Companies (MFCs): These non-bank lenders fund mortgages via securitization and institutional investors rather than customer deposits. First National and MCAP together account for over $320B in mortgages under administration alone.
  • Mortgage Investment Entities (MIEs): MIEs are alternative lenders that pool investor capital for borrowers falling outside traditional bank criteria. MCAN leads with $8.27B in assets under management, followed by ACM Commercial Mortgage Fund at $4.8B.
Confidential – For Recipient's Use Only.

4. Regional Highlights

  • Ontario & BC: RBC maintains a commanding lead, holding $250.1 billion in Ontario (21.9% share) and $98.6 billion in BC (22.5% share). TD holds a strong second place in both markets.
  • Quebec: The Quebec market remains highly distinct; Desjardins (35.7% market share) and National Bank (15.2%) dominate the province, capturing a larger combined share than the Big Five banks combined.
  • Alberta & Prairies: RBC remains the volume leader in Alberta, Manitoba, and Saskatchewan. However, National Bank posted massive decade-long growth rates (157% in AB, 195% in MB/SK) largely due to the CWB acquisition.
  • Atlantic Canada: RBC leads with a 30.1% market share ($24.1 billion). Scotiabank, despite its historic roots in the region, is the only major lender to record a decade-long decline (-0.6%) in its Atlantic RESL portfolio.

5. Risk Factors and Credit Quality

  • Credit Losses (PCL & Net Write-offs): Provision for Credit Losses (PCLs) on residential mortgages rose to $199 million across the Big 6 in Q1 2026. Scotiabank continues to account for an outsized share, representing $27 million of the $38 million total Big 6 residential mortgage net write-offs. Total residential mortgage Allowance for Credit Losses (ACLs) represent just a small fraction of the Big 6's total ACL ($3.7 billion out of over $37.6 billion).
  • Delinquency Rates: The national mortgage delinquency rate remains historically low at 0.24% as of Q4 2025. In the insured segment, delinquency rates are incredibly well-contained, recorded at 0.32% for CMHC and 0.21% for Sagen in December 2025.

6. Macroeconomic Outlook and Rate Path

  • Growth Outlook: 2026 is expected to be a period of below-potential economic growth, limiting income growth and constraining household flexibility during the renewal cycle.
  • Policy Rates: The Bank of Canada policy rate is expected to stabilize near 2.25% through most of 2026.
  • Bond Yields: 5-year Government of Canada bond yields are projected to average 3.08% by March 2027, reaching ~3.18% by year-end. While below 2023 peaks, these yields will still cause significant "payment shock" for borrowers renewing from 2020/2021 record-low rates.
  • Labour Market: Unemployment should remain elevated near 6.5% through 2026. However, major banks forecast a gradual decline to 6.0% by the end of 2027, pointing to an eventual easing of credit stress.
  • Housing: Forecasts indicate continued home price weakness in 2026, followed by a gradual recovery in 2027. Downside risks are heavily concentrated in high-priced urban markets in Ontario and B.C., where the condo segment faces ongoing oversupply and investor liquidation pressures.

Terminology Note

  • Big 5: RBC, TD, Scotiabank, BMO, CIBC
  • Big 6: Big 5 + National Bank
  • Big 7: Big 6 + Desjardins

The grouping referenced varies by data availability. Credit risk metrics (PCL, ACL, net write-offs) use Big 6 data; market share analysis typically includes all Big 7 institutions.