Canada’s big banks fighting to be your mortgage lender
Canada’s Big Six banks have been gearing up for a fight ahead of a cascade of mortgages renewing in the next couple of years.
Coming out of a period of slow mortgage demand, the banks are hungry for new business as 1.2 million fixed-rate mortgages are maturing this year — and many will be up for grabs.
Some analysts expect the banks to compete hard to keep and snatch each other’s clients during the so-called “Great Renewal,” as their profitability and customer retention are at stake. They will also have to fend off inroads made by nonbank lenders, who have been gaining traction by offering low rates to borrowers through mortgage brokers.
Between 2025 and 2028, “we could see waves of competition and tactics are likely to evolve and change,” wrote RBC analyst Darko Mihelic in a note to clients last November.
Ultimately, Canadian consumers stand to benefit from competitive strategies that make the mortgage market easier to navigate while driving interest rates lower. Big banks are already offering cash back, “special” rate discounts and loyalty points to lure customers in.
Here’s a look at some moves and deals already being employed by the Big Six lenders.
TD
Money laundering penalties recently imposed on TD, which limit the bank’s ability to grow in the U.S., could push it to focus on aggressively expanding its Canadian mortgage book, according to analysts.
In a statement to the Star, TD said its focus “remains on the growth of our RESL (Real Estate Secured Lending) business,” which includes mortgages and home equity lines of credit (HELOCs), adding it has been expanding its mortgage specialist sales force across national branches.
Sona Mehta, head of Canadian personal banking at TD, said in a December call with analysts that the specialized bankers “work as an ecosystem between the branches and our mobile mortgage sales force.”
“We just started that this November, and we’re already seeing really strong results,” Mehta said, adding the program improves the bank’s relationships with customers.
The bank is currently offering a cash bonus of up to $4,100 to homeowners applying for a new mortgage or HELOC by March, including switches to TD.
TD is also advertising “special rates” discounted off posted rates. As of Jan. 24, it had lowered its three-year fixed rate to 5.09 per cent from 6.94 per cent.
RBC
As part of its competitive mortgage strategy in Canada, RBC is investing in technology to improve its end-to-end digital renewal process ahead of upcoming mortgage renewals, CEO Dave McKay said in the bank’s fourth-quarter conference call.
Canada’s largest bank will see $340 billion in uninsured mortgages renew in the next five years, the bulk of which are set to mature by 2027. Borrowers with uninsured mortgages, those with a down payment of 20 per cent or more, have recently joined some insured mortgagors in being able to switch lenders upon renewal without being stress-tested — making it more enticing for these mortgages to switch hands.
“We plan to maintain our disciplined growth strategy amidst intense competition,” McKay said.
RBC is offering a cash bonus of up to $3,500, a rebate in switching fees of up to $1,100, and 55,000 Avion loyalty points to customers applying for a mortgage with them until the end of January.
As of Jan. 24, RBC’s advertised “special offer” purchase and switch rates were 4.89 per cent for three-year and five-year fixed mortgages. The five-year variable rate was 4.95 per cent.
CIBC
Although CIBC has not actively pursued strong mortgage growth, it would likely be able to defend its share in a mortgage war, said Mihelic.
Victor Dodig, CEO of CIBC, said in a recent conference with other Canadian bank CEOs that he is “confident” renewal rates with CIBC will be high, adding the bank has been proactively reaching out to clients five months before renewal.
“It’ll be competitive,” said Dodig. “We live in a very competitive market, the premier league of banking as I see it. But we know that we can hold our own.”
The bank has been offering cashback of up to $4,500 to borrowers who apply to switch their mortgage to CIBC by February. To qualify, their mortgage must transfer to CIBC within 120 days of the application and they must set up and make payments from a new or existing CIBC checking account.
As of Jan. 24, CIBC’s advertised rates for new mortgages were: 4.89 per cent for three-year and five-year fixed, and 4.95 per cent for three-year variable.
BMO
BMO will see $158.9 billion in mortgages renew between 2025 and 2028, according to its fourth-quarter financial statements. Of those, 70 per cent have fixed rates.
The average monthly payment increase for the bank’s customers is expected to be $150 in 2025, and jump to $200 in 2026, assuming an interest rate of 4.5 per cent at renewal and including regular payments and additional payments made to date.
“We continue to grow market share in key categories, including deposits, mortgages and credit cards, supported by a record year in net core customer growth and peer-leading checking and savings account acquisition,” BMO CEO Darryl White said at the bank’s fourth-quarter conference call.
The bank is offering cashback of up to $4,100 to people switching from another financial institution on the condition that payments are made from a BMO account. The deal ends Feb. 10.
As of Jan. 24, BMO was advertising the following limited time offers: a five-year fixed insured mortgage rate of 4.59 per cent, a conventional five-year fixed rate of 4.94 per cent, and five-year variable rate of 4.95 per cent.
Scotiabank
Mihelic believes Scotiabank would want to defend and grow its mortgage business as it is among the banks most “at risk” of losing profitability and customers versus other banks that have larger mortgage books and deposit bases.
Scotiabank will see $60 billion in mortgages come up for renewal in 2025 and $90 billion in 2026, according to CEO Scott Thomson.
Scotiabank has a “switch to Scotiabank program” offering, among other promotions, a $1,200 rebate on switch fees. To qualify, borrowers must have a minimum mortgage balance of $100,000 and apply with one of the bank’s home financing advisers. The offer is valid for all closed fixed-rate mortgages with a three-year term or greater, and the closed variable-rate mortgage with a five-year term.
With the Scotia Mortgage+ program, Scotiabank offers “preferred” mortgage rates to new and existing clients with a “banking bundle,” which includes a banking account and another eligible product, such as investments, insurance and credit cards. Thomson says the Mortgage+ offering accounted for 75 per cent of the bank’s mortgage originations in 2024.
As of Jan. 24, Scotiabank’s five-year posted variable rate was 5.9 per cent. Its three-year fixed rate was 6.54 per cent, and five-year fixed rate was 6.49 per cent.
National Bank
More than half of National Bank’s mortgages were held by residents of Quebec in the fourth quarter of 2024, while insured mortgages accounted for 29 per cent of real estate secured lending.
The bank is offering up to $5,800 cashback to borrowers who transfer their mortgage and add other products and services by the end of January.
As of Jan. 24, National Bank’s five-year variable rate was 4.95 per cent. Its three-year fixed rate was 4.89 per cent, and five-year fixed was 4.84 per cent.
This article was first reported by The Star
