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The archetype of online direct-to-consumer mortgage lending has decided that brokers are an excellent way to distribute mortgages, after all.

nesto, a fintech that started as a mortgage brokerage in 2018 and then morphed into a DTC lender, has partnered with M3 Group. Beginning this March, M3's army of 8,500 brokers will have nesto mortgages in their arsenal.

Who's doing the victory dance over this alliance? Let's dive into the mutual admiration society of nesto, M3 and its brokers, and see who benefits.

What's in it for M3 brokers?

The Bank of Canada didn't just put rate hikes on the back burner today; it unplugged the stove.

The Bank is now "confident enough" that inflation is on the right track to not publicly dwell on rate hike risk any longer. That was today's message from Senior Deputy Governor Carolyn Rogers after the BoC left its overnight rate at 5%.

Instead, the Bank says it's now shifting its focus to "how long" the overnight rate needs to marinate "at the current level.”

"We need to give these higher interest rates time to do their work," Macklem said, offering no clues on how long he'll let Canada's high-rate stew simmer. The forward market thinks it'll take another four to six months. But, historically, rates have plateaued at peak levels for anywhere from a few months to 17 months. So far, it's been six months since the last hike.

The Bank says that higher rates can't be completely ruled out, but it's very rare for the Bank of Canada to hike a lot, pause 5+ months, hike more, pause 5+ months more, and then hike again.

In the world of lending, second mortgages are the middle children—often overlooked. Few federally regulated lenders even sell second mortgages, but Community Trust Company (CTC) is one of them.

The company recently announced that it expanded the list of lenders it lends behind. CTC now offers second mortgages to customers of most banks, credit unions and monolines. At a time when seconds are as popular as they have been in years, that's meaningful.

Are more accessible seconds really that big of a deal?

Well, yes, if you're someone who needs to borrow against their home and:

• Doesn't want to break their low-rate first mortgage and refinance
• Can't qualify for a new first mortgage or prime HELOC
• Doesn't want to pay higher rates from unregulated competitors, or
• Doesn't trust private lenders.

For folks like these, CTC may be just the ticket.

Here's how (and why) its 2nd mortgage works...

It's been over two years since lender Strive Capital ventured onto the mortgage scene. In that time, it has charmed the broker crowd and muscled in on market share. And it did so without a staple of lending: prime uninsured mortgages.

Last week, Strive finally plugged that gaping hole, launching uninsured rates to the masses. True to form, MLN donned its critique hat to give this newcomer product a once-over. Here is the verdict.

At TD Securities' annual financial services conference last week, Canada's top bank cop, Peter Routledge, reminded everyone how he's not a fan of fixed-payment variable mortgages.

He told the audience, "We’re making changes to capital requirements that 1) ensure both lenders and mortgage insurers are holding adequate capital for the risks presented by negative amortization, and 2) set incentives for lenders to prevent negative amortizations to begin with. Published October 20th and coming into effect, now in fiscal Q1, 2024."

"Ultimately, these are decisions that will be made at the lender level," Routledge added, and he's right. We recently spoke with a major bank exec on background about OSFI's efforts to discourage fixed-payment variables, which are arguably misguided. He suggested there's little appetite among most banks to do away with these products.