First-Time Buyers Now Split Between Brokers and Banks, What Changed in 2025

A 27-year-old accountant in Calgary spent three weekends in early 2025 researching mortgage rates on her laptop, then walked into a broker's office on the fourth. She could have locked in at her bank for 4.84%. The broker found her 4.67% with better prepayment terms at a credit union she'd never heard of. That pattern, research online, execute through an intermediary, repeated across Canada enough times to reshape the mortgage origination map.

Mortgage brokers now facilitate 38% of all home loans nationwide, up from roughly 33% two years prior, according to Mortgage Professionals Canada's 2026 consumer trends report. The shift is most pronounced among recent first-time buyers, where the broker share hit 48%. The gap between those two numbers reveals the mechanism: first-time buyers are driving the channel migration, and repeat buyers are following at a lag.

Why First-Timers Chose Advice Over Loyalty

First-time buyers in 2025 faced a different calculation than the generation before them. Mortgage stress tests tightened again in mid-2024 under revised OSFI B-20 guidelines, narrowing the already-thin approval margins for buyers stretching toward a down payment. A quarter-point rate difference no longer separated "approved" from "declined." It separated approved with flexibility from approved on a razor edge.

Brokers won that cohort not by promising the lowest rate but by selling optionality. A 5-year fixed at 4.89% with 20% annual prepayment allowance outperforms a 4.79% product capped at 10% if the borrower expects income growth or a bonus. First-time buyers, often relying on parental down payment gifts that required complex documentation (over 30% did in 2025), needed someone to navigate lender-specific quirks on gift equity. Big banks standardized those requirements. Monoline lenders, reachable only through brokers, tailored them.

The result: brokers captured market share by reframing the question from "What's the cheapest loan?" to "What's the mortgage I can actually manage if something changes?"

The Big Bank Erosion Nobody Expected

For a decade, the Big Six held first-time buyers by default. You banked there, you got pre-approved there, you closed there. That loyalty loop broke in 2025. Branch closures accelerated through 2024, leaving many buyers with a mobile app and a 1-800 number instead of a local advisor. When advice became remote either way, the tiebreaker shifted to product terms and lender options.

Monoline lenders, institutions that only originate mortgages and rely entirely on brokers for distribution, gained ground by offering more aggressive amortization structures and niche products the banks had exited. A first-time buyer needing a 30-year amortization to hit debt service ratios found options through brokers that the branch couldn't match.

Regional growth mirrored this. Broker adoption rose across all provinces in 2025, not just the high-cost metros. That spread signals a structural shift, not a local pricing anomaly.

What Renewals Still Reveal

The 48% broker share among first-time buyers coexists with a harder truth: banks still dominate renewals. Borrowers who secured their mortgage through a broker in 2020 often renewed directly with their existing lender in 2025, bypassing the intermediary. Inertia and simplicity won when the stakes felt lower.

That retention advantage matters. The broker channel is winning acquisition but losing the long game on portfolio stickiness. A borrower who switches to a broker for purchase but reverts to the bank at renewal is not a permanent shift, it's a one-time arbitrage.

The 2026 question is whether the advice relationship brokers built during origination holds through the renewal cycle, or whether the path of least resistance pulls borrowers back to their existing lender when the mortgage matures.