Lenders expect clarity on a borrower’s arrangement with their employer as companies ramp up expectations for in-office work
A major pandemic-era trend was the movement of Canadians further away from their office location as remote-working arrangements became more and more prominent, helping facilitate migration into more affordable markets.
But a gradual ramping-up of return-to-office efforts by employers is raising questions about the future of that movement – and whether lenders will take a more rigorous approach to mortgage applicants who live far from their workplace.
Lenders are still generally receptive to borrowers living a long way from their workplace, but Durham Region-based mortgage broker Sherry Corbitt told Canadian Mortgage Professional that further clarification or assurance from employers about that arrangement remains commonplace.
“A lot of the times we’ll send in the job letter and the paystub, and then we’ll get back, ‘Please revise the job letter to say that there’s a hybrid, or what the obligation of in-office is,’” she said. “I would probably say I see that on half of my purchase files.”
A recent survey by real estate giant RE/MAX Canada showed a growing number of Canadians are prepared to make compromises to buy a property, including moving further away from their current location.
But Corbitt said lenders generally want answers as soon as a commute stretches beyond 100 kilometres. “They want to understand, ‘Does this client really plan to do a three-hour commute in the winter, or can they work from home?’ If it’s work from home, it’s checked and gone – the condition is waived,” she said.
“If it’s no, you have to commute for three hours, they start saying: ‘Well, are they paying rent somewhere? Are they living with family somewhere? Is there a shelter payment somewhere?’”
Shifting employer expectations change the borrower picture
Investors are reportedly flooding back into the office market in major urban centres like Toronto amid rising clamour from employers for their workers to spend at least a few days a week in the office.
The country’s top banks are stepping up efforts to bring back workers, while earlier this year the federal government’s Treasury Board said it was mandating a five-day office week.
The swing back toward employers’ in-office preferences, Corbitt said, is also impacting clients at renewal. “There’s a lot of back-to-work, which is biting a couple of people for sure,” she said. “I’ve had some clients call me and say, ‘I’ve been mandated back to work… I moved during COVID. How does that affect my renewal?’
“So then we discuss: Do you renew soon? Do we look at a different lender? Or do you get another job first? There’s a lot of strategies.”
First-time buyers gain ground in a sluggish market
While changing work arrangements are posing plenty of questions, one of the bright sides to a generally torrid 2026 housing market is that plenty of first-time buyers are finally finding opportunities to gain a foothold on the property ladder.
Prices have fallen across many markets amid milder competition and first-time buyers are now able to snag a property for between $500,000 and $600,000 that, Corbitt said, might have gone for $200,000 higher during the pandemic.
That price depreciation stands in stark contrast to the trend seen during the pandemic, when intense bidding wars often pushed offers well above list prices and saw many hopeful buyers overpowered in the market.
The ability to provide longer amortizations of up to 30 years is also providing extra breathing space, Corbitt added, even for buyers who could technically afford to pay on a 25-year schedule.
“We talk about the strategy of setting it at 30 years so you’re very comfortable with your payment,” she said, “and then once you’re in it, you can accelerate your payment by doing prepayments.”
But climbing interest rates are also presenting challenges for first-time buyers, while economic uncertainty has been exacerbated by the ongoing trade war with the US and rising inflation.
The cost-of-living crisis is still a real concern for many buyers, and Corbitt highlighted the reality that a high percentage of first-time entrants to the market don’t have a significant emergency fund to rely on after they’ve made their purchase.
“First-time buyers are using all their savings to get into a home,” she said. “There’s a lot of anxiety about not having any safety net to fall back on.”
Presenting a comprehensive slate of options to clients in those situations, Corbitt said, is the best way to keep them with a broker rather than defecting to a bank. “If you provide them security, then it’s not a conversation about rate,” she said.
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