Be a borrower's best ally in 2025

This article was produced in partnership with Neighbourhood Holdings

Against a backdrop of the looming renewal wave, record-high inflation and rising household debt, and an overall tightening of banks’ lending criteria, Canadian homeowners are facing serious turbulence in 2025 and beyond. Thankfully, in every challenge there lies an opportunity — and savvy brokers are embracing the chance to step up and make a difference for clients when they need them the most.

“Mortgage brokers are becoming more than just deal-makers — they’re financial strategists, problem-solvers, and borrowers’ best hope for navigating an increasingly restrictive mortgage market,” said Jared Stanley, Senior Director of Originations at Neighbourhood Holdings, in his recent blog Mortgage Renewals, Rising Debt, and Stricter Lending Rules: How Brokers Can Be Borrowers’ Best Ally in 2025. “The next two years will be a defining period for Canadian homeowners — and mortgage brokers will play a critical role in ensuring borrowers find the best possible solutions.”

Key shifts in mortgage landscape

There are several key shifts shaping the mortgage industry this year, including the fact that nearly 60% of outstanding mortgages in Canada will renew by 2026. As Stanley outlines in greater detail in his article, that percentage means around 1.2 million homeowners will end up with significantly higher mortgage rates than they sit with currently. This sticker shock is exacerbated by the fact that most of those mortgages were initially secured during the COVID-19 pandemic when interest rates were at or below 1%.

Compounding this is another key shift, in the form of a widespread economic downturn. Canadians are facing an increase to their monthly bills — the CMHC estimates mortgage payments could end up as much as 30-50% higher — while also grappling with record-high inflation, rising credit card debt, and stagnant wages. Ultimately, this may result in a spike in refinancing or restructuring, said Stanley in the Rising Consumer Debt and Increased Demand for Debt Consolidation section of his blog.

“Many borrowers who locked in those ultra-low rates in 2020-2021 will now be renewing at rates more than double or even triple their original rates,” Stanley explained further. “For some, this means a manageable increase. But for many, it represents a financial crisis.”

Complicating matters further are recent regulatory changes from the Office of the Superintendent of Financial Institutions (OSFI). Under the tightening of lending criteria, there’s a risk that many borrowers who can technically afford their mortgage payments may not qualify under new stress tests and loan-to-income caps. Announced in March last year, the fear is that those who once easily qualified for refinancing may find themselves shut out from traditional lenders — just as the renewals begin to pour in.

A broker’s role in navigating uncertainty

What these market changes mean at brass tacks is that now more than ever, mortgage brokers are essential in guiding clients through refinancing, debt consolidation, and alternative lending. Primed to be the heroes in the situation, Stanley outlines ways brokers can step up, step in, and make a difference for their clients.

One of Stanley’s top recommendations is to get ahead of the situation. Start renewal conversations early, because the reality is many borrowers won’t realize the full impact of their renewal until they receive the lender’s offer — which may mean little or no time to explore other options.

“Brokers who reach out proactively can make a huge difference,” Stanley said in the blog, adding that helping a client assess new payments and highlighting what solutions are available to them is a great way to showcase your value as a mortgage expert and help your client avoid last-minute stress.

Educating borrowers on debt consolidation is table stakes at this juncture. Juggling credit card balances, car payments, and the overall rising cost of living means rolling that high interest debt into their mortgage can be a smart move. Explaining the pros and cons of refinancing and how alternative solutions can benefit people in different situations is also part and parcel of sound advice, as is a review of different amortization strategies.

Another tip is to know your client audience: do you deal with self-employed borrowers, gig workers, or others with variable incomes?  “Offer solutions beyond big banks,” Stanley advised.

Brokers who understand alternative lending solutions are indispensable for these borrowers who don’t fit traditional models — show these clients that you understand they’re facing tough choices, but you’ve got the expertise to support them with viable options. Host webinars or educational sessions to kick-start the conversation, and emphasize the importance of planning ahead.

“The key is education — borrowers need to understand their full range of options, not just assume their bank’s offer is the only one available,” Stanley said. “Position yourself as a trusted financial resource, not just a mortgage facilitator.”

Ultimately, brokers are essential in the changing lending market and clients need expert guidance now more than ever.

“If you’re a broker, now is the time to strengthen your lender partnerships and prepare for the wave of renewals ahead.”

Want the benefit of Jared’s full advice? Check out his blog, Mortgage Renewals, Rising Debt, and Stricter Lending Rules: How Brokers Can Be Borrowers’ Best Ally in 2025, or reach out to Neighbourhood Holdings today.