Current arrangements ‘protect consumers while still allowing brokers to do their jobs efficiently’
Regulation of Ontario’s mortgage industry has become a hot‑button topic in recent years, with brokers sounding off on a flurry of new compliance and educational requirements introduced at both the provincial and federal levels.
While the pace of change has sometimes felt brisk, one experienced Ottawa broker believes most of the new rules are landing in roughly the right place.
The current regulatory framework is “in a good place,” according to Andrew Thake (pictured top), a mortgage broker with Smart Debt Mortgages in Ottawa.
He told Canadian Mortgage Professional that he didn’t see industry regulators overstepping the mark in how they monitor brokers’ work. “The rules are clear, and brokers understand what’s expected of them,” he said.
“From my experience, the balance feels right. It protects consumers while still allowing brokers to do their jobs efficiently.”
Some of those changes have drawn a mixed response from brokers who feel regulators have gone about increasing scrutiny on the profession in the wrong way, adding unnecessary layers of red tape to the process of arranging financing.
For those critics, the concern is not just the time and cost of additional compliance, but the risk that excessive oversight could ultimately limit choice and flexibility for consumers.
Others, though, say the rules are proportionate and appropriate, allowing brokers to go about their daily work while also maintaining adequate oversight over the industry.
Recent reforms have impacted multiple parts of the mortgage process. Changes introduced include a new licensing requirement for mortgage agents transacting in private mortgages as well as new anti-money laundering (AML) and anti-terrorist financing reporting responsibilities for brokers.
Those measures have arrived alongside tighter suitability and disclosure expectations, forcing brokers to document more thoroughly why a particular recommendation is appropriate for a client’s needs and risk profile.
FINTRAC changes ‘haven’t been difficult to manage’
The AML measures – which came into effect after mortgage administrators, brokers and lenders were required to fulfil obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act – have been criticized by some brokers as a burdensome requirement.
But Thake said the adjustment, mandated in October 2024, hasn’t been a challenge. “The recent FINTRAC updates haven’t been difficult to manage in my practice,” he said. “Most of the screening and compliance steps are built directly into our software, so it’s mainly a few extra clicks as part of the process.
“There is some added cost for screening tools, but it’s relatively small and hasn’t had a meaningful impact on how we operate.”
In his view, the evolution of the rules over the last decade has generally been measured rather than heavy‑handed.
Thake doesn’t see any reason for regulators to adjust the current framework either, viewing the measures announced over the past decade as largely sufficient to protect consumers and safeguard the financial system while also allowing brokers to flourish.
“At this point, I don’t see any major gaps that need additional focus,” he said. “Over the years, regulators have introduced changes such as stress test adjustments and limits around HELOC borrowing, which shows they’re actively monitoring the market and responding where needed. From my perspective, the existing measures already address the key risks.”
OSFI keeps stress test unchanged after latest deliberations
The mortgage stress test is one of the most visible examples of that regulatory approach. The rule requires borrowers to prove they can meet a mortgage payment calculated at 5.25% or two percentage points above their contract rate – whichever is higher – before they can qualify with a federally regulated lender.
That standard has faced plenty of broker scrutiny, with some viewing it as an unnecessary barrier for first‑time buyers and move‑up purchasers in markets where affordability is already stretched.
Still, supporters say the stress test has played a central role in ensuring that homeowners and mortgage holders can withstand interest rate shocks.
Last week, the Office of the Superintendent of Financial Institutions (OSFI) opted to leave that rule unchanged, signalling the regulator’s continued belief that the measure remains an important line of defence after the rapid run‑up in rates since 2022.
Debate is continuing among brokers on the question of whether regulation could be stripped back or adjusted across the industry without spiking the risk of unethical behaviour and negatively impacting consumers.
Some industry voices have argued that more flexibility around qualification, documentation or product structures could help borrowers navigate today’s higher‑rate environment, while others counter that loosening standards too far would recreate the vulnerabilities that regulators have spent years trying to address.
Thake, though, doesn’t see any further changes as necessary and believes brokers have more than enough leeway to do their jobs without their toes being stepped on by regulators.
That might mean the focus for individual firms should be on building efficient systems, training teams properly, and integrating compliance into their daily workflows so that regulatory requirements become a natural part of client service rather than a distraction from it.
“Overall, I’m optimistic about the outlook for the mortgage brokerage industry,” he said. “Regulation continues to evolve, but it hasn’t disrupted our ability to serve clients. With the right systems in place, compliance is very manageable and the current environment feels stable.”
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