Mortgage Originations Surge—Second-Biggest Month on Record

Canadian uninsured mortgage originations soared to a staggering CA$40.7 billion in June, marking a 27.5% increase (CA$8.77 billion) compared to the previous year. This makes it the second-highest June on record, trailing only behind the 2021 pandemic-era spike.

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What’s Fueling the Surge

This surge—occurring despite only modest home sales—appears to be driven by the wave of pre-construction projects completing. Many investors who bought during the low-rate frenzy of the early 2020s are now closing on their units and securing mortgages to fund these purchases.

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A Broader Trend

Extending beyond the monthly figure, lending activity over the past year confirms the momentum:

• In the 12 months ending June 2025, lenders originated CA$436.44 billion in uninsured mortgage loans.
• That’s a 38.5% year-over-year growth (CA$121.3 billion) and represents the highest volume since March 2022.

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Rate Trends: Lower, Yet Elevated

While the overall trend favors more leverage, mortgage rates remain elevated compared to pre-2023 lows:

• The average uninsured mortgage rate in June was 4.59%, up slightly from the previous month—but still a solid 102 basis points lower than June 2024.
• That rate drop translates to approximately 10% more borrowing power for homeowners.

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Borrower Preferences: Tactical Choices in a Fluid Market

Loan type indicators show how borrowers are adapting:

Mortgage Type	Share (%)	Average Rate
3‑year to under 5‑year fixed	36.9%	4.13%
Variable Rates	31.5%	4.53%
5‑year (or longer) fixed	~14.7%	4.25%
1‑ to under 3‑year fixed	12.1%	5.34%
Less than 1‑year fixed	4.8%	7.61%

• The most popular choice was the mid-term fixed range (3 to under 5 years), offering a competitive 4.13% rate and the largest market share.
• Variable-rate mortgages are gaining traction again (31.5% share), as rates trend below average and buyers anticipate further cuts.
• Traditional 5-year fixed mortgages accounted for roughly 14.7% of originations, with a relatively low rate of 4.25%, drawing some borrowers back to the stable long-term option.
• Shorter-term and ultra-short-term fixed loans remain niche, with rates high enough to deter most applications.

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Why This Matters

1. Revived Borrower Activity

This originations spike may reflect a combination of pent-up demand and necessary funding completions, not just first-time homebuyers or renewed market confidence.

2. Affordability Shifts

Though rates remain elevated compared to a few years ago, the year-over-year drop provides modest relief and greater affordability—especially critical for those refinancing or closing deals now.

3. Strategic Borrowing

Borrowers’ preferences highlight a balancing act:

• Mid-term fixed rates offer cheaper predictability.
• Variable rate loans are becoming attractive again amid rate-cut forecasts.
• 5-year fixed loans remain a conservative choice for financial security.

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Conclusion

Uninsured mortgage originations are seeing a major comeback—ranking as the second-highest June on record. This surge, tied to pre-construction project completions, combined with still-adaptable mortgage rates, creates a dynamic and opportune environment for borrowers. Whether through mid-term fixed or variable options, those seeking mortgages today have clear leverage—if they act wisely.