Executive says Canadian lenders are becomingly increasingly attuned to the needs of foreign investors
Canadian lenders and mortgage investment corporations (MICs) are continuing to attract attention from international investors as their prominence in Canada’s mortgage space rises – but a “nuanced change” is underway in how those relationships are developing, according to an executive in the sector.
Benjamin Sammut (pictured), principal at Dabble Capital Advisory, told Canadian Mortgage Professional he saw lenders outside the traditional A space taking a more proactive approach to international interest, creating new credit buckets, pools and tranches to attract foreign investment instead of waiting for it to arrive.
“What’s changed now is that a lot of the MICs and alternative lenders, right now, are noticing that international interest is coming in,” he said. “And so they’re starting to create bespoke vehicles for them rather than just saying, ‘Yeah, we’ve got some inventory we can sell you,’ or ‘Sure, you can fund our existing operations.’”
That means major banks, primarily from Europe, Australia and the US, now have a growing variety of options to tap into a larger pool of Canadian funds, with Canadian lenders adopting what Sammut described as an “if you build it, they will come” model.
It’s a well-known fact, both here and abroad, that Canada’s banking space is dominated by six major players – traditionally making it difficult for other competitors to break through.
But international investors are sitting up and taking note of emerging opportunities down the credit curve in the near-prime space, especially because a growing number of borrowers are unable to qualify for an A mortgage and are turning to alt-A and less mainstream options.
“As a waterfall, that’s just pushing more and more volume down into the true alternative lenders and into the private space,” Sammut said. “So now, even if you’re a prime tier-one bank from abroad, you don’t necessarily need to come here and be a prime lender. You can come here and take the prime piece of a near-prime mortgage or a near-prime pool of funds or portfolio.”
Where is international interest in Canadian mortgages strongest?
Australian investors are showing plenty of interest in those opportunities because of how similar Canada’s financial system is to theirs.
Asian and European banks, too, view Canadian lenders as appealing because of the attractiveness of the size and scale of certain yield opportunities.
Carl De Souza of Morningstar DBRS notes that while Fairstone and EQB’s recent acquisitions reflect a push for scale and diversification, Canada’s small market limits major M&A prospects for 2026. https://t.co/GI4AkINIwY
— Canadian Mortgage Professional Magazine (@CMPmagazine) December 12, 2025
That’s not to say those entities aren’t approaching the space with caution, and Sammut highlighted a few hurdles facing Canadian lenders hoping to secure international investment.
“The first one is going to be currency risk, but that’s usually pretty easily hedged,” he said. “The second one is going to be tax burden – so depending on how these vehicles are structured, some of them are going to be a bit more tax-heavy than others.”
Still, he described tax mitigation strategies as “fairly easy” for the right vehicle. Another challenge can be addressing differences between markets – for instance, if international lenders are more used to buying longer-term paper than the shorter-term paper typically seen in Canada, even in its prime space.
Canada viewed internationally as a resilient real estate market
On the whole, though, Canada’s housing market has a reputation in international circles as a consistently strong one, even notwithstanding the slowdown seen in recent years.
Toronto and Vancouver, the country’s two priciest markets, have seen activity cool off since the booming highs of the COVID-19 pandemic. Still, there’s no sign of a broader crash, and experts including major bank economists and real estate associations are cautiously optimistic about the future of the market in 2026 and beyond.
International investors targeting a specific yield, Sammut said, might not find what they’re looking for. “But if you’re looking at the staying power and the scale,” he said, “usually that’s enticing enough for the right investor to come in and say, ‘We wanted to put $300 million into the market, and now we’ve got vehicles that can do that.’”
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