Banks winning the rate war – but monolines will fight back, says veteran broker
Banks periodically become much more competitive on pricing, pulling volume away from other lenders, although Trafford said the trend has usually tended to eventually reverse throughout his long stint in the industry.
“I’ve been doing this 36 years and I’ve seen banks get aggressive and then cool off,” he said. “Right now they’re very aggressive – but they’ll cool off. Then monolines will become a better option. Right now, they’re not, at least in some situations.”
Many prospective homebuyers pulled back from the housing market in recent years as interest rates jumped and economic unease grew. That’s seen brokers and lenders increasingly turn their attention to the refinance and renewal sectors, with scores of Canadians seeing their mortgages renew in 2025 and 2026 – often at much higher rates than they first took out during the pandemic.
In that environment, brokers have long reported how difficult it’s become to offer clients a better rate than the bank, although alternative and private lending options have also gathered momentum because some stretched borrowers are unable to find financing with mainstream lenders.
Banks increasingly dominant in renewal race
When brokers are competing with banks on renewal, they often have little option but to play a long game, advise their client to stick with their bank, and trust that the good-faith approach will pay off down the line.
