A slow purchase market has resulted in a hypercompetitive renewal environment
Purchase activity is slowly picking up across some Canadian housing markets – but with homebuying still largely muted, renewals are remaining a big focus for banks and mortgage brokers alike in the second half of 2025.
The wave of mortgages still due for renewal this year and next means banks have taken an increasingly aggressive approach to securing and retaining clients, leading to an ultracompetitive renewal environment.
When going head-to-head with banks for business, brokers often face an immediate disadvantage by not being able to offer as competitive a rate as the top banking institutions, meaning plenty are deciding to play the long game in building their business.
For Lev Keselman (pictured top), founder and managing partner at Peak Mortgage Company in British Columbia, that approach centres around advising borrowers about the best option in the knowledge that they might go with the bank now – but could prove a source of business in the future.
“It’s a very slow real estate market, so a lot of the banks have been more aggressive than normal on renewals,” he told Canadian Mortgage Professional. “A lot of the time when the client is able to afford the payment and they just want to renew at the best rate, I almost feel like the broker has been to some extent pushed out of that market where the banks are often offering better renewal rates.
“[Banks are] trying to do what they can to retain their book. A lot of times for brokers, it comes down to having a chat with the client and ultimately giving them some advice to help them negotiate with the bank they’re dealing with. Because we’re just ultimately not supercompetitive in a lot of situations right now compared to what the branches are doing on renewals.”
Securing the lowest rate is far from the only consideration borrowers should keep in mind when they renew their mortgage – but brokers know it’s often the decisive one, and that means the best option might be laying the groundwork for the future when a homeowner is overwhelmingly likely to stick with the bank when renewing.
“From a broker’s point of view, you can still give them advice, tell them ‘You’re getting a good rate from your bank,’” Keselman said. “Advise them on what kind of term [they should choose]. Maybe help them negotiate. Then say, ‘Save my number. Contact me in five years or in three years, whenever it comes up for renewal again.’ And hopefully it’s a different market at that point in time.”
A new national survey from Mortgage Professionals Canada (MPC) shows that two-thirds of respondents said they are likely to use a mortgage broker the next time they need a mortgage. Among those who had previously used one, 81% said they would do so again.https://t.co/bmG5z53QlM
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 18, 2025
Borrowers opt for safety in a turbulent mortgage market
The safest option is increasingly appealing to borrowers in a market where scores of mortgages are coming up for renewal at significantly higher rates than before.
A new report by the Bank of Canada confirmed what most in the mortgage industry knew: that borrowers coming up for renewal are set to see some strain from higher payments, even if the central bank ruled out a “severe worsening of financial stress” as a result of that trend.
Mortgage rates aren’t expected to see a big drop anytime soon, either. The central bank’s next policy rate decision is scheduled for next Wednesday (July 30), but it looks almost certain to keep rates unchanged thanks to a recent uptick in inflation and stronger-than-expected labour market data.
Fixed rates, meanwhile, have also jumped in recent weeks because of a surge in five-year Government of Canada bond yields after US president Donald Trump signalled a fresh escalation in the ongoing trade war.
Some renewing homeowners struggling – but finding a way
But Keselman said even most borrowers who can’t comfortably afford any increase in rates are finding ways to navigate that challenging market.
“There’s a lot of payment shock for sure. A lot of borrowers locked in back during the lows of 2020, 2021 and are now facing a payment which is significantly higher,” he said. “A lot of the time, those renewals become more of a refinance, to stretch the amortization back out and make the payments more affordable.”
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