Mortgage Lenders in Canada
- The majority of Canadians still get a mortgage from a bank, but there are other mortgage lenders that may offer more competitive rates or make it easier to qualify for a mortgage.
- Alternative mortgage lenders, including credit unions and mortgage finance companies, are increasingly popular among Canadian homebuyers seeking flexible mortgage solutions.
- Non-bank lenders may provide tailored options for borrowers with non-traditional financial situations.
Residential Mortgage Balances in Canada (Q2 2024)
Most of Canada’s outstanding residential mortgage balances can be found at the big banks. The chart above displays the distribution of residential mortgage balances in Canada for Q2 2024, totaling $2 trillion. Major mortgage lenders include RBC (21.7% of the market, $433.3 billion), Scotiabank (14.5%, $289.4 billion), and TD (13.4%, $268.7 billion). Other significant players are CIBC (13.2%, $264.5 billion), BMO (7.6%, $151.8 billion), and Desjardins (6.2%, $125 billion). Smaller lenders include Equitable, Manulife, ATB, and Laurentian Bank. Others make up the remaining 15.8% of the market. This mortgage statistic highlights the concentration of outstanding mortgage debt among Canada's largest lenders.
Where Do Canadians Get Their Mortgages?
While most outstanding Canadian mortgages are held by the biggest banks, an increasingly larger proportion of new mortgages are coming from non-bank lenders. However, most Canadians still get their mortgages from a bank, with 57% of new mortgages in Canada coming from the country's banks. This includes big banks like Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), and Scotiabank.
Credit unions are also a popular option for Canadians looking for a mortgage. 21.88% of new mortgages in Canada are issued by credit unions. Other lenders, such as mortgage investment entities (MIE), mortgage finance companies (MFC), insurance companies, and trust companies, make up the remaining amount of new mortgages in Canada. These lenders are typically more specialized and may offer unique products.
Distribution of New Mortgages in Canada
Canada’s Big Six Banks
Canada’s six largest banks and how much money they have loaned out to people in real estate loans, which includes both mortgages and HELOCs, are:
Looking at just mortgages, these are the balances of outstanding residential mortgages at Canada’s biggest banks:
Currently, the lowest mortgage rate offered by the big 6 banks, namely RBC, Scotiabank, CIBC, TD, BMO, and National Bank, is a 5-year fixed rate mortgage at 4.34% by CIBC. The big six banks often don't have the lowest mortgage rate in the market, but they are still popular choices for mortgage seekers due to their reputation and stability. Here are the lowest mortgage rates offered by the big 6 banks, by term:
As the largest bank in Canada, based on market capitalization, the number of branches, and residential mortgage balances, RBC offers a full range of financial services, including personal and commercial banking, wealth management, and insurance. Established in 1864, RBC has a strong international presence, with operations in 29 countries.
TD’s roots go back to 1855, when the Bank of Toronto was founded. In 1955, the merger of the Dominion Bank and the Bank of Toronto created the Toronto-Dominion Bank, which would then acquire Canada Trust in 2000. TD is known for its excellent customer service, having received the highest customer satisfaction ranking among the big banks in J.D. Power’s studies for multiple years. TD has an extensive branch network across Canada and the United States.
CIBC dates back to 1867 when the Canadian Bank of Commerce was founded, and formed in 1961 from the merger with Imperial Bank of Canada. CIBC offers a variety of financial solutions, including mortgages, investment services, and commercial banking, and it has positioned itself as a leading bank in Canada.
Mortgage Characteristics
With a Remaining Amortization of 25+ Years
Are Mortgage Amortizations Getting Longer?
Rising variable mortgage rates have lengthed the amortization period of some mortgages, while high home prices and affordability issues are also causing borrowers to select longer amortizations to reduce monthly payments.
Over the past two years, the majority of new mortgages at chartered banks had an amortization greater than 25 years.
Percentage of Mortgages with a Remaining Amortization Over 25 Years
Mortgages Up For Renewal
The Renewals Are Coming
It’s estimated that each month, around 1.28% of all Canadian mortgages will be up for renewal until October 2024. That number will rise after October 2024 to 1.52% of all mortgages each and every month, until April 2025.
That’s because many Canadians renewed their mortgages during the low-interest years of 2020 and 2021. Most of them have terms of 5 years or less and will be coming up for renewal soon. Unfortunately, they’ll be renewing during a period of higher interest, which could shock many homeowners.
% of Mortgages Renewing in 1 & 2 Years
Other Banks in Canada
In addition to the Big Six, Canada boasts a diverse landscape of smaller banks. These chartered banks can also have competitive mortgage rates and serve regional or niche markets.
Founded in 1970, Equitable Bank is Canada’s seventh-largest Schedule I bank. It focuses on flexible lending solutions, particularly for those who may not fit conventional banking criteria. This includes mortgages for borrowers who might be self-employed, have a limited credit history, or are real estate investors.
Established in 1984, the Canadian Western Bank (CWB) has regional roots deep in the western provinces, where it has built strong community ties. CWB has received awards such as Canada’s Top 100 Employers, Mortgage Industry Employer of Choice from the Canadian Mortgage Awards, and awards for Top Alternative Lender by Canadian Mortgage Professional.
Wealth One is a new digital bank, established in 2015, that focuses on providing innovative financial solutions to meet the needs of underserved communities, particularly the immigrant community. Wealth One’s mortgages specialize in borrowers who are self-employed or entrepreneurs, new to Canada, and real estate investors as an ‘Alt-A’ mortgage lender.
Shinhan Bank, founded in 1897, is South Korea's first bank. Shinhan Bank Canada opened in 2009 and now has branches in Ontario and British Columbia.
Mortgages From Credit Unions
Credit Union Membership
Credit unions have been steadily increasing their presence in Canada’s mortgage industry, growing from 15% of all new mortgages in 2020 to 22% of all new mortgages in 2023.
The rise in popularity of credit unions can be attributed to their unique structure and customer-focused approach, but unlike banks, credit unions aren’t required to stress test their mortgage applicants. This allows credit unions to be more flexible and work with borrowers who may not meet the stricter requirements of traditional banks.
As a result, credit unions are now an increasingly attractive options for borrowers that are often overlooked by traditional banks. This includes self-employed individuals, new immigrants or those with lower credit scores.
Credit unions operate provincially in Canada, which means that you can't get a mortgage from a credit union based in another province. However, with almost 200 credit unions and over 1,600 credit union locations across Canada, there is likely one near you that can provide personalized and competitive mortgages to meet your needs.
Notable Credit Unions in Canada
Access Credit Union: Located in Manitoba, Access focuses on providing personalized financial services to its members, emphasizing community support and competitive offerings in personal loans and mortgages. Access also offers competitive savings rates.
Affinity Credit Union: Based in Saskatchewan, Affinity offers a 130-day mortgage rate guarantee. It also covers up to $1,750 in mortgage switching fees, and has multiple mortgage options.
Caisse Alliance: Operating mainly in the French-speaking regions of Northern Ontario, Caisse Alliance has been focused on accessibility and human connection to improve member’s quality of life. Mortgages with Caisse Alliance are eligible for member dividends.
Kawartha Credit Union: Located in Central Ontario, Kawartha Credit Union has branches stretching from Cornwall to Parry Sound.
Prospera Credit Union: Based in British Columbia with branches in Vancouver, the Fraser Valley, and Okanagan, Prospera offers mortgages with plenty of options. These include an amortization of up to 30 years, an annual principal prepayment of up to 20%, and terms from 1 to 10 years.
Mortgage Finance Companies (MFCs)
Mortgage Finance Companies (MFCs) are a type of non-bank mortgage lender in Canada. Unlike private mortgage lenders, which aren't subject to the same regulations as traditional banks and allow for them to have more flexibility in their lending practices, MFCs are subject to federal regulations. That's because most mortgages MFCs lend out are insured mortgages, including those that use government-backed mortgage insurance by CMHC. You will typically need to work with a mortgage broker to get a mortgage from a MFC.
As a non-bank mortgage lender, Merix specializes in alternative mortgages and offers flexible solutions for borrowers who do not fit the criteria of traditional lenders. This includes allowing flexible down payment sources, non-stress-tested rates, stated income, and rental income offsets.
Private Mortgage Lenders and MICs
Private Mortgage Lenders
Having a credit score of less than 600 can make it difficult to obtain a mortgage, as it is considered a low credit score. This indicates that the borrower may have had trouble managing their credit in the past or currently has financial instability.
Many traditional lenders, such as banks and credit unions, require a minimum credit score of 680 or higher to qualify for a mortgage. Borrowers with a credit score less than 680 may have to seek alternative lending options, which may come with higher interest rates and fees. Examples include B-lenders and private lenders.
Private mortgage lenders are an option that many borrowers with bad credit turn to. These lenders often have more flexible requirements and may be willing to work with borrowers who have a lower credit score, but this usually comes at a higher cost. Many private mortgages are interest-only, which means the borrower is only required to pay the interest on the loan each month and not the principal. This reduces the size of their mortgage payments, but borrowers aren’t building any equity or paying off their loans.
According to the Financial Services Regulatory Authority of Ontario (FSRA), 10.6% of new mortgages in 2021 in Ontario by mortgage brokers were for private mortgages. That adds up to $22.4 billion in 2021 alone.
Private Mortgages in Ontario
Mortgage Investment Corporations
Mortgage Investment Corporations (MICs) are a type of private mortgage lender, and they are gaining popularity in the mortgage industry as an alternative investment option. According to the CMHC, Mortgage Investment Entities (MIEs), which include MICs, accounted for 13% of all new mortgages in Q1 2023. That’s a big jump from the 8% market share seen in Q1 2020.
MICs allow individual investors to pool their funds together and invest in a portfolio of mortgages managed by professionals, providing diversification and risk management. Popular publicly traded MICs in Canada include Atrium Mortgage Investment Corporation and MCAN Financial Group.
MICs often invest in mortgages with a low LTV ratio, at a higher interest rate. In 2020, the CMHC found that the average mortgage at MICs had an LTV ratio of less than 57%. Meanwhile, the average interest rate was over 9%!
Popular MIC Mortgage Lenders
Atrium is the largest residential Mortgage Investment Corporation (MIC) based in Canada, focused on providing short-term financing solutions. For residential mortgages, they typically offer terms of 1 year with interest-only payments, for mortgages with a loan-to-value of less than 80% in Southern Ontario and Western Canada. They focus on self-employed borrowers, newcomers, and investors.
Alta West Mortgage Capital Corporation is an alternative mortgage lender that helps borrowers who have been declined by the big banks, such as those with bad credit, who are self-employed, or who are newcomers to Canada. For investors, they offer two managed MIC funds with monthly dividend payments.
MCAN Mortgage Corporation is a mortgage investment corporation that specializes in residential and commercial mortgages. As a mortgage lender, they have over 3,000 brokers across Canada and offer 1, 3, and 5-year fixed mortgage rates and 5-year adjustable rates. MCAN helps mortgage borrowers by allowing alternative income calculations, extended amortization, and higher debt-service ratios.
Disclaimer:
- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
- Financial institutions and brokerages may compensate us for connecting customers to them through payments for advertisements, clicks, and leads.
- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.