First-Time Buyers Are Choosing Brokers at Nearly Double the National Rate
In 2021, a first-time buyer in Toronto who walked into their parents' bank could secure a mortgage at 1.79% in under two weeks. By late 2025, that same buyer, now looking at a second property or advising younger siblings, was telling them to call a broker first. The shift isn't anecdotal. It shows up clearly in the numbers.
Mortgage brokers now originate 38% of all home loans in Canada, according to Mortgage Professionals Canada's 2026 data. That figure alone marks a significant climb from the broker channel's historical position as a secondary option behind the Big Five banks. But the more telling number sits one layer deeper: among Canadians who bought their first home in the past year, 48% used a broker. That's nearly double the penetration rate for all buyers, and it signals a generational divide in how people approach the single largest financial transaction most will ever make.
The collapse of the one-stop-shop model
For decades, the major banks held mortgages through inertia as much as product. You banked where your parents banked, and when you needed a mortgage, you asked the advisor at the branch where your chequing account lived. The math was rarely comparative. The process felt safe because it was familiar.
That model has eroded faster than the institutions expected. First-time buyers in 2025 and 2026 are treating their mortgage as a standalone product, not as part of a relationship bundle. They're comfortable, often more comfortable, having their mortgage with a monoline lender they've never heard of, while keeping their day-to-day banking at a brand they grew up with. The unbundling isn't ideological. It's practical. A 20-basis-point spread on a $600,000 mortgage is $120 a month, or $36,000 over the first term. That's not rounding error.
Brokers have also closed the digital gap. A first-time buyer in 2018 might have chosen the bank for the convenience of uploading documents through a polished app. In 2026, most broker networks offer unified platforms that match or exceed the banks' user experience. The technological moat disappeared, and with it, one of the last structural reasons to go direct.
What first-time buyers are actually buying
The conventional reading is that first-time buyers choose brokers because they're rate-shopping harder than repeat buyers. The data suggests something more nuanced. Forty-one percent of recent borrowers cited "expert advice" as a top-three reason for selecting their mortgage provider, a figure up sharply from roughly 30% in prior cycles. Rate still matters, but the decision is increasingly about navigation, not just price.
The stress test is part of this. OSFI's qualifying rate, either 5.25% or the contract rate plus 2%, pushes a meaningful number of applicants out of Big Five approval range, even when their actual debt-service ratios are manageable. A broker can route that same buyer to a credit union or monoline lender with more flexible underwriting. The buyer isn't looking for a better rate in that scenario. They're looking for approval.
The advice gap also shows up in prepayment penalties and portability clauses, terms that mean almost nothing to a 28-year-old signing their first mortgage but can cost five figures if circumstances change. Brokers are incentivized to explain those terms because their commission model depends on repeat business and referrals. A bank employee processing 40 files a month has less room to walk through the fine print.
Regional growth, national pattern
Broker usage grew year-over-year in every province in 2025, breaking out of its historical concentration in Ontario and British Columbia. That's a structural shift. When a channel gains share uniformly across regions with different housing markets, price points, and borrower demographics, it indicates the underlying driver is systemic, not local.
The renewal advantage still sits with the banks. Most borrowers take the path of least resistance when their term expires, and the bank holding the existing mortgage wins that default decision more often than not. But the initial origination is now contested ground, and the 48% figure among first-time buyers suggests the contest is tilting in one direction.
In 2021, a first-time buyer in Toronto who walked into their parents' bank could secure a mortgage at 1.79% in under two weeks. By late 2025, that same buyer, now looking at a second property or advising younger siblings, was telling them to call a broker first. The shift isn't anecdotal. It shows up clearly in the numbers.
Mortgage brokers now originate 38% of all home loans in Canada, according to Mortgage Professionals Canada's 2026 data. That figure alone marks a significant climb from the broker channel's historical position as a secondary option behind the Big Five banks. But the more telling number sits one layer deeper: among Canadians who bought their first home in the past year, 48% used a broker. That's nearly double the penetration rate for all buyers, and it signals a generational divide in how people approach the single largest financial transaction most will ever make.
The collapse of the one-stop-shop model
For decades, the major banks held mortgages through inertia as much as product. You banked where your parents banked, and when you needed a mortgage, you asked the advisor at the branch where your chequing account lived. The math was rarely comparative. The process felt safe because it was familiar.
That model has eroded faster than the institutions expected. First-time buyers in 2025 and 2026 are treating their mortgage as a standalone product, not as part of a relationship bundle. They're comfortable, often more comfortable, having their mortgage with a monoline lender they've never heard of, while keeping their day-to-day banking at a brand they grew up with. The unbundling isn't ideological. It's practical. A 20-basis-point spread on a $600,000 mortgage is $120 a month, or $36,000 over the first term. That's not rounding error.
Brokers have also closed the digital gap. A first-time buyer in 2018 might have chosen the bank for the convenience of uploading documents through a polished app. In 2026, most broker networks offer unified platforms that match or exceed the banks' user experience. The technological moat disappeared, and with it, one of the last structural reasons to go direct.
What first-time buyers are actually buying
The conventional reading is that first-time buyers choose brokers because they're rate-shopping harder than repeat buyers. The data suggests something more nuanced. Forty-one percent of recent borrowers cited "expert advice" as a top-three reason for selecting their mortgage provider, a figure up sharply from roughly 30% in prior cycles. Rate still matters, but the decision is increasingly about navigation, not just price.
The stress test is part of this. OSFI's qualifying rate, either 5.25% or the contract rate plus 2%, pushes a meaningful number of applicants out of Big Five approval range, even when their actual debt-service ratios are manageable. A broker can route that same buyer to a credit union or monoline lender with more flexible underwriting. The buyer isn't looking for a better rate in that scenario. They're looking for approval.
The advice gap also shows up in prepayment penalties and portability clauses, terms that mean almost nothing to a 28-year-old signing their first mortgage but can cost five figures if circumstances change. Brokers are incentivized to explain those terms because their commission model depends on repeat business and referrals. A bank employee processing 40 files a month has less room to walk through the fine print.
Regional growth, national pattern
Broker usage grew year-over-year in every province in 2025, breaking out of its historical concentration in Ontario and British Columbia. That's a structural shift. When a channel gains share uniformly across regions with different housing markets, price points, and borrower demographics, it indicates the underlying driver is systemic, not local.
The renewal advantage still sits with the banks. Most borrowers take the path of least resistance when their term expires, and the bank holding the existing mortgage wins that default decision more often than not. But the initial origination is now contested ground, and the 48% figure among first-time buyers suggests the contest is tilting in one direction.
Read Next
Trump's 'Forced Labour' Tariffs on Canada Deserve More Scrutiny Than They're Getting
7 Ways to Cut Your Costs Before the August 19 US Tariff Hike Hits Canadian Households
7 Canadian household budgets hit hardest by new US tariffs, and 4 moves to protect yours before August 19
Trump's tariff threats demand Canada's steadiest posture, not its loudest reply