The Mortgage Landscape in 2025
With rising interest rates, evolving government policies, and fluctuating home prices, Canadian homebuyers are exploring all available mortgage options before committing to a lender.
In 2024, 48% of Canadian borrowers chose a mortgage broker—a notable increase from previous years. Meanwhile, the percentage of homebuyers going directly to banks has declined, showing a shift in borrower preferences.
So, should you use a mortgage broker or go directly to a bank for your home financing in 2025? Let’s break down the differences, benefits, and key factors to consider.
Traditional Lenders (Banks & Credit Unions)
What Are Traditional Lenders?
Traditional lenders, also known as A lenders, include major Canadian banks and credit unions. These institutions offer government-regulated mortgage products and have strict lending criteria.
Pros of Using a Bank for Your Mortgage:
✔ Security & Stability – Banks offer regulated mortgage products with predictable terms.
✔ Bundled Services – Many buyers prefer banks for the convenience of bundling mortgages with other financial services (e.g., savings, investments, and insurance).
✔ Lower Interest Rates for Prime Borrowers – Borrowers with high credit scores and stable incomes may access the lowest rates.
Cons of Using a Bank for Your Mortgage:
❌ Strict Qualification Requirements – Banks require strong credit, steady employment, and low debt-to-income ratios.
❌ Less Flexibility – Banks follow rigid lending guidelines, limiting options for self-employed individuals, newcomers, or those with non-traditional incomes.
❌ The Stress Test Factor – Borrowers must pass the mortgage stress test, which can make qualification challenging in today’s high-rate environment.
Alternative Lenders (B Lenders & Private Lenders)
What Are B Lenders?
B lenders are alternative mortgage providers that cater to borrowers who do not qualify under traditional banking requirements. These lenders include trust companies, monoline lenders, and mortgage investment corporations (MICs).
Why Homebuyers Consider B Lenders:
✔ Flexible Approval Process – B lenders do not require a stress test and have more lenient qualification criteria.
✔ Ideal for Self-Employed & Newcomers – Alternative lenders work with business owners, freelancers, and newcomers to Canada who may have irregular income.
✔ Higher Loan-to-Value Ratios – Some B lenders offer higher borrowing limits, making them an option for buyers with smaller down payments.
Potential Downsides of B Lenders:
❌ Higher Interest Rates – B lenders typically charge higher rates to offset their increased lending risk.
❌ Additional Fees – Borrowers may need to pay higher lender fees compared to banks.
❌ Shorter Mortgage Terms – Many B lender mortgages have 1- to 3-year terms, requiring borrowers to refinance sooner.
Mortgage Brokers: Your Gateway to Multiple Lenders
What Does a Mortgage Broker Do?
A mortgage broker acts as an intermediary between borrowers and lenders. Rather than being tied to one bank, brokers compare mortgage products across multiple lenders, including A lenders, B lenders, and private mortgage providers.
Why More Canadians Are Choosing Mortgage Brokers in 2025
1. Access to Competitive Rates
Brokers have access to multiple lenders, allowing them to negotiate the best mortgage rates on behalf of their clients. Instead of visiting different banks individually, homebuyers can compare options in one place.
2. Personalized Mortgage Solutions
Brokers tailor financing solutions to each client’s situation. Whether you are:
A first-time homebuyer looking for low down payment options
A self-employed borrower needing alternative documentation mortgages
A homeowner looking to refinance for better rates or debt consolidation
… a mortgage broker can find lenders willing to work with you.
3. Flexible Approval Process
Since brokers have access to both A lenders and B lenders, they can find solutions for borrowers struggling to qualify at traditional banks. This flexibility is essential in an era of high stress-test rates and tight lending restrictions.
Mortgage Brokers vs. Banks: Which One is Right for You?
Feature | Mortgage Brokers | Banks |
Access to Lenders | Multiple lenders (A, B & private) | One lender (bank’s own products) |
Interest Rate Options | Competitive, broker-negotiated | Set by the bank |
Approval Flexibility | High (alternative options available) | Low (strict qualification) |
Stress Test Requirement | May not be required (for B lenders) | Required for all borrowers |
Best for… | First-time buyers, self-employed, refinancers | Prime borrowers, long-term banking clients |
What This Means for Homebuyers in 2025
The decision between a mortgage broker and a bank depends on your financial situation, goals, and risk tolerance.
✔ If you have strong credit and prefer banking stability, a bank mortgage may be the best choice.
✔ If you need flexibility, rate comparisons, or alternative lending options, working with a mortgage broker can open more doors.
In today’s evolving real estate market, having expert guidance is key. A mortgage broker can help you navigate the latest trends, rates, and policies—saving you time and money in the long run.
Let’s Find the Right Mortgage for You
At Seventy Seven Park, we specialize in real estate wealth management, helping homebuyers and investors secure the best mortgage solutions for their needs.
📞 Call us at (416) 350-8448
📧 Email us at info@seventysevenpark.ca
Get in touch today and let’s make your mortgage process simple, seamless, and stress-free.
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