TD mortgage portfolio shrinks 9% despite record originations
TD Bank’s Canadian residential mortgage portfolio fell 9% year over year to $242.0 billion in the third quarter, despite the bank reporting record mortgage originations.
Growth in the broader secured-lending portfolio came entirely from HELOCs, which jumped 28% to $177.2 billion. Combined mortgage and HELOC balances rose roughly 4%, while total Canadian real estate secured lending reached $422 billion.
On the bank’s earnings call, Canadian Personal Banking head Sona Mehta said TD’s focus on faster decisions and specialized mortgage staff helped produce a record quarter for proprietary originations without sacrificing margins.
“What we’ve been able to do is maintain disciplined pricing in spite of what’s been a competitive market,” she told analysts.
Mehta said TD has fully scaled its first agentic AI tool for real estate secured lending, which is speeding up decisions. The bank has also added in-branch home borrowing specialists and expanded its mobile mortgage specialist team over the past year.
Credit indicators move higher
TD’s Canadian mortgage impaired-loan ratio rose to 0.23%, up from 0.13% a year earlier, while impaired mortgage balances increased to $552 million from $350 million. The HELOC impaired-loan ratio edged down to 0.14% from 0.15%.
The average loan-to-value ratio across the Canadian secured lending portfolio rose to 59%, compared with 54% in the third quarter of 2025. TD said less than 1% of the portfolio was both uninsured and carried a borrower credit score of 650 or below and an LTV above 75%.
The insured share fell to 13% from 15% a year earlier, while the regional mix was unchanged. Ontario accounted for 55% of balances, followed by B.C. at 20%, the Prairies at 14%, Quebec at 8% and Atlantic Canada at 3%.
Variable-rate exposure rises
Variable-rate loans accounted for 46% of TD’s Canadian real estate secured lending portfolio, up from 39% a year earlier. Mortgages represented 22 percentage points of the current variable-rate share and HELOCs the remaining 24 points.
About 90% of the portfolio was amortizing, including 76% of HELOC balances. Of those amortizing balances, 5% mature over the remainder of fiscal 2026, with another 26% due in 2027 and 23% in 2028.
At the bank level, TD reported adjusted net income of $4.67 billion, or $2.77 per share, as Canadian Personal and Commercial Banking delivered record revenue and earnings.
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Last modified: August 27, 2026
