First-time buyers now choose brokers 48% of the time, what lenders aren't seeing
The loyalty tax on a five-year fixed mortgage now runs somewhere between 10 and 25 basis points. That gap, the difference between what a Big Six bank offers its existing customer and what a broker can source from the broader market, has been measurable for years, but it rarely moved behavior at scale. Until recently.
Mortgage Professionals Canada recorded 38% broker share across the total Canadian mortgage market in 2025. Among first-time homebuyers specifically, that figure reached 48%. The shift isn't happening in pockets. It's happening nationally, in mid-tier cities as much as Toronto or Vancouver, and it's being driven by borrowers who now treat the mortgage as a standalone financial decision rather than an extension of their existing banking relationship.
What changed in the decision structure
The OSFI stress test, which requires borrowers to qualify at the higher of their contract rate plus 2% or 5.25%, introduced a qualification problem that most bank staff aren't trained to solve creatively. A first-time buyer earning $85,000 with $60,000 saved can pass the test with one lender's debt treatment and fail it with another's, even at identical rates. The broker's value isn't the rate. It's knowing which of 40 lenders will approve the file.
That dynamic has separated rate-shopping from approval-shopping, and the latter is where brokers now dominate. Monoline lenders, institutions that do mortgages and nothing else, have grown volume by offering prepayment flexibility and debt-consolidation structures the Big Six won't touch. A borrower with $18,000 in car debt and a modest RRSP balance doesn't get creative solutions from a branch representative working on throughput. They get them from a broker with access to a credit union in Saskatchewan that treats the RRSP withdrawal differently.
The advice layer banks aren't pricing
The First Home Savings Account has created a second wave of broker consultations that banks are missing entirely. Since the FHSA launched, over 750,000 accounts have been opened. Most of those account holders don't understand how to layer the FHSA with an RRSP Home Buyers' Plan withdrawal, or whether pulling from both sources creates a tax trap in year two. Bank mortgage specialists explain the mortgage. Brokers are explaining the capital structure of the purchase itself, often in a 90-minute consultation that happens before the rate is even discussed.
This is "advice alpha," and it's not being captured in the rate comparison. A borrower who consolidates $22,000 in credit card debt into the mortgage at 4.89%, extends amortization by three years to drop the monthly payment by $340, and uses that $340 to max out the FHSA contribution room is solving a different problem than a borrower who just locks the lowest rate. The broker facilitated the former. The bank would have offered the latter and called it best execution.
What the 48% figure actually represents
First-time buyers aren't more rate-sensitive than repeat buyers. They're more uncertain. The median FTHB in 2025 had never read a mortgage commitment, didn't know what "blended payments" meant, and was Googling whether land transfer tax could be financed. They had higher information costs, and brokers absorbed those costs in a way that branch staff, optimized for processing approved applications quickly, do not.
The 48% also reflects something structural about how young buyers make decisions. They don't have a "main bank" the way their parents did. They have a chequing account at Tangerine, a credit card through a fintech, an investment account at Questrade. Brand loyalty isn't a factor because the brand relationship never formed. When it came time to choose a mortgage source, they started from zero, Googled "best mortgage rate," and landed on a broker's lead-capture page.
The banks that are responding have started deploying mobile mortgage specialists and offering retention-rate matching, but those are defensive plays. The structural advantage still sits with the broker: access to the full market, no internal product quotas, and a business model that rewards solving the approval problem rather than defending the rate sheet.
The loyalty tax on a five-year fixed mortgage now runs somewhere between 10 and 25 basis points. That gap, the difference between what a Big Six bank offers its existing customer and what a broker can source from the broader market, has been measurable for years, but it rarely moved behavior at scale. Until recently.
Mortgage Professionals Canada recorded 38% broker share across the total Canadian mortgage market in 2025. Among first-time homebuyers specifically, that figure reached 48%. The shift isn't happening in pockets. It's happening nationally, in mid-tier cities as much as Toronto or Vancouver, and it's being driven by borrowers who now treat the mortgage as a standalone financial decision rather than an extension of their existing banking relationship.
What changed in the decision structure
The OSFI stress test, which requires borrowers to qualify at the higher of their contract rate plus 2% or 5.25%, introduced a qualification problem that most bank staff aren't trained to solve creatively. A first-time buyer earning $85,000 with $60,000 saved can pass the test with one lender's debt treatment and fail it with another's, even at identical rates. The broker's value isn't the rate. It's knowing which of 40 lenders will approve the file.
That dynamic has separated rate-shopping from approval-shopping, and the latter is where brokers now dominate. Monoline lenders, institutions that do mortgages and nothing else, have grown volume by offering prepayment flexibility and debt-consolidation structures the Big Six won't touch. A borrower with $18,000 in car debt and a modest RRSP balance doesn't get creative solutions from a branch representative working on throughput. They get them from a broker with access to a credit union in Saskatchewan that treats the RRSP withdrawal differently.
The advice layer banks aren't pricing
The First Home Savings Account has created a second wave of broker consultations that banks are missing entirely. Since the FHSA launched, over 750,000 accounts have been opened. Most of those account holders don't understand how to layer the FHSA with an RRSP Home Buyers' Plan withdrawal, or whether pulling from both sources creates a tax trap in year two. Bank mortgage specialists explain the mortgage. Brokers are explaining the capital structure of the purchase itself, often in a 90-minute consultation that happens before the rate is even discussed.
This is "advice alpha," and it's not being captured in the rate comparison. A borrower who consolidates $22,000 in credit card debt into the mortgage at 4.89%, extends amortization by three years to drop the monthly payment by $340, and uses that $340 to max out the FHSA contribution room is solving a different problem than a borrower who just locks the lowest rate. The broker facilitated the former. The bank would have offered the latter and called it best execution.
What the 48% figure actually represents
First-time buyers aren't more rate-sensitive than repeat buyers. They're more uncertain. The median FTHB in 2025 had never read a mortgage commitment, didn't know what "blended payments" meant, and was Googling whether land transfer tax could be financed. They had higher information costs, and brokers absorbed those costs in a way that branch staff, optimized for processing approved applications quickly, do not.
The 48% also reflects something structural about how young buyers make decisions. They don't have a "main bank" the way their parents did. They have a chequing account at Tangerine, a credit card through a fintech, an investment account at Questrade. Brand loyalty isn't a factor because the brand relationship never formed. When it came time to choose a mortgage source, they started from zero, Googled "best mortgage rate," and landed on a broker's lead-capture page.
The banks that are responding have started deploying mobile mortgage specialists and offering retention-rate matching, but those are defensive plays. The structural advantage still sits with the broker: access to the full market, no internal product quotas, and a business model that rewards solving the approval problem rather than defending the rate sheet.
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