

TD Bank’s Mortgage Mojo Shifts Gears: Growth Slows, Strategy Strengthens
As Canada’s housing market hits the brakes, TD Bank shifts into high gear where it matters most.
While many Canadian lenders are sweating over a softer housing market in 2025, TD Bank is taking a different route leaning into quality, channel strength, and credit savvy as mortgage originations dip. The result? A story not of retreat, but of smart recalibration.
In its second-quarter earnings, TD reported a dip in residential mortgage volumes as the real estate market cooled and broker-channel activity tapered off. But unlike others caught off guard, TD seemed ready and ready to pivot.
The Spring Market That Wasn’t
“Uncertainty is weighing on buyer sentiment,” said Sona Mehta, TD’s Group Head of Canadian Personal Banking, during the Q2 earnings call. Earlier in the year, the bank had forecast a livelier spring home-buying season. But “a lot has changed in the last four months,” she admitted.
And she’s right. Between stubborn inflation, cautious rate moves, and a jittery consumer base, Canada’s once red-hot real estate engine is idling. The impact was sharpest in the broker channel, where originations softened noticeably.
TD’s Secret Weapon: Its Own People
Here’s where TD pulls ahead of the pack.
Despite a slowdown through external brokers, TD’s proprietary channels including in-branch mortgage advisors and Mobile Mortgage Specialists (MMS) are on fire.
“Both branch and MMS originations were up double digits year-over-year,” Mehta revealed. “The branch-MMS referral ecosystem is performing incredibly well.”
Translation? TD’s investment in its own people and personalized service is paying off. In a market where rates are similar across the board, relationships and speed win and TD has both.
Affluent Clients, Strategic Paydowns
But the surprises didn’t end there. The bank also saw a wave of mortgage paydowns in January and February, as premium clients used bonuses and personal liquidity to pay off large chunks of their debt.
This kind of financial discipline reflects the nature of TD’s borrower base, wealthier, well-prepared, and conservative in uncertain times. It also means TD isn’t just fighting to lend; it’s managing a high-quality book of business with care.
Less Chasing, More Choosing
In a bold declaration of intent, TD made it clear it’s not chasing volume just to look good on paper.
“We will compete to win profitable business,” Mehta said, “and then leverage our strength in channels where we can differentiate on speed and customer experience.”
That’s a sharp contrast to some lenders still racing to grab market share, often at the expense of margin and long-term stability.
Risk? Managed. Credit? Strong.
On the risk side, TD also had some good news. Provisions for credit losses (PCLs) dropped by $270 million to $946 million in Q2, a signal of strong borrower performance across both Canadian and U.S. portfolios.
Chief Risk Officer Ajai Bambawale credited the improvement to “good credit quality” and a stabilizing rate environment that’s giving borrowers some breathing room.
“We are well reserved,” he said, noting TD has added over $500 million in buffer provisions over the past two quarters. Even with ongoing global uncertainty, TD’s balance sheet is built to withstand the tremors.
From Volume to Value: TD’s New Mortgage Playbook
While some banks are stuck playing defense, TD is executing a confident new game plan:
- Invest in proprietary channels.
- Target profitable, premium clients.
- Maintain credit discipline.
- Use quality as a competitive edge.
The result? A bank that’s not panicking about shrinking mortgage volumes but instead, positioning itself to win when the tide turns.
In a market full of noise, TD’s message is refreshingly clear: we’re not here to chase. We’re here to choose.