A surge of renewals could mean a surge of opportunity for brokers
This article was provided by Home Trust
Mortgage renewals are taking centre stage this year, and the spotlight is on brokers to help clients navigate the process.
Figures from Canada Mortgage and Housing Corporation show that 1.2 million mortgages are coming up for renewal. Notably, 85% of these were signed when the Bank of Canada’s (BoC) overnight rate was at or below 1%.
“For those who have a mortgage, the big worry is the interest rate they’ll have to pay when they renew,” Carolyn Rogers, senior deputy governor of the BoC, said in remarks to the Economic Club of Canada late last year. “Even with recent declines in interest rates, most of those borrowers will likely face a significant increase in their payment.”
Pierre Martin, vice president of residential mortgage lending at alternative lender Home Trust, agrees. He noted that the prolonged high-rate environment following the COVID-19 pandemic has put many renewing borrowers across Canada in a more difficult financial position this year.
“Coming into 2025, we have seen a drastic increase in interest rates across residential mortgages from where it was at the start of the pandemic,” said Martin.
An opportunity for brokers
Already feeling the squeeze from rising prices and global economic uncertainty, the prospect of higher payments upon renewal is giving many borrowers across Canada financial jitters.
In fact, a report from Mortgage Professionals Canada found that nearly seven out of 10 borrowers with terms ending this year are anxious about the upcoming renewal process.
With so many mortgage borrowers feeling anxious about their upcoming renewals, there is an opportunity for brokers to position themselves as advisors who can help clients navigate toward the best renewal solution for their financial circumstances.
“Renewal brings an opportunity to review and assess a client’s situation,” said Martin. “Brokers can demonstrate their expertise and professionalism by finding the right solution for their needs.”
One effective strategy for brokers is to proactively engage clients in renewal discussions well before their current terms expire. Ideally, brokers maintain regular contact with clients throughout the mortgage term. This proactive approach not only strengthens relationships but also enhances brokers' understanding of their clients' profiles, enabling them to identify the best lending solutions.
To keep in touch, brokers should maintain an active database of updated client information. Whether a simple spreadsheet or a more robust customer relationship management (CRM) platform, a database will make setting reminders to keep your clients informed easier. Useful information to communicate includes important account milestones, changes to the overnight rate, trends in the housing market or macroeconomic events that can impact lending activity. You can also store notes on changes to your clients' circumstances in your database, which will be valuable when their mortgage comes up for renewal.
Through regular communication with their clients, brokers can evaluate the best options available for their circumstances at renewal time, whether from a traditional lender or an alternative lender with a broader risk appetite framework, such as Home Trust.
Growing in the alternative space
Having been a leader in the alternative lending space for nearly four decades, Martin said Home Trust understands how large and diverse the segment is.
“Alternative borrowers include business owners, newcomers in the early stages of building or rebuilding their credit history, and folks with unique life experiences precluding them from more traditional mortgage channels,” said Martin.
As a result, alternative lending scenarios can vary widely, from straightforward cases involving "near-prime" credit scores to more complex financial situations.
“These are borrowers looking for solutions beyond those offered through more traditional ‘prime’ mortgage and borrowing channels,” said Martin.
And because every renewal scenario is going to be different, it’s important that brokers work with a lender focused on providing solutions. These lenders will work with brokers to get their clients' full picture and help them shepherd the deal to closing.
In this context, Home Trust stands out as a strong alternative lending partner due to its comprehensive support and solution-oriented approach to servicing. Their sales and underwriting teams strive to understand borrowers' complete financial stories to provide the best solutions and the most competitive rates in the alternative lending market.
These solutions include extended ratios that can go up to 60% total debt service (TDS) compared to the 44% TDS generally offered by the big five banks.
Moreover, Home Trust has made great strides in streamlining their approval process by enhancing the coordination between front-line sales, underwriting and operations teams. This commitment to continuous improvement ensures that Home Trust broker partners can expect a more seamless and responsive experience for their renewal clients.
“Renewal has always been a very important process for us,” said Martin. “If borrowers are experiencing challenges in this renewal environment, then we’re ready to help you find the best solution that matches their goals and profile.”
The alternative pioneer
Not all lenders are created equal. As the renewal wave approaches, brokers might want to rethink what they can expect from an alternative lender.
Home Trust’s reputation for common-sense, solutions-oriented lending stands out in the mortgage landscape.
And this year, with a more streamlined approval process and competitive rates, Home Trust is gearing up to help you tackle your renewal pipeline and grow your alternative book.
To learn more, contact a Home Trust business development manager or visit hometrust.ca/brokerlogin/sales-team.
