Canada’s Mortgage Model is Broken — and Boomers Are the Duct Tape Holding it Together
Let me take you back to 2004.
I’d just closed on a weird corner lot off the Danforth — east of Pape, back when “east of Pape” still meant cracked sidewalks, payphones, and a guy selling bootleg DVDs outside the Value Village. I needed a construction loan. Walked into a TD branch with a briefcase full of hope and a budget scribbled on a Tims napkin, armed with the confidence of a man who thought “soft costs” meant picking cheaper tile.
The banker looked me dead in the eye and said,
“We can offer you a 1-year open variable at prime plus 3.”
I blinked.
“Do you have anything with a longer term?”
He smiled like a man who’d survived the 80s and lost his appetite for risk.
“You must be thinking of America.”
Fast forward 20 years, and somehow, nothing’s changed.
Except the prices.
Oh man… the prices.
We’ve Got a 2025 Problem with a 2000s Mortgage Toolkit
Here in Canada, the average mortgage term is 5 years.
Not 30. Not fixed for life. Just… 5.
If your loan was a kid, it’d be getting invited to birthday parties before you’re done paying off the land transfer tax.
In a high-interest world, this model is a ticking time bomb.
And guess what?
We’re down to the last few ticks.
People who bought homes during the COVID rate fiesta are about to get mortgage renewal letters that feel more like ransom notes.
A $750K mortgage at 1.7% in 2020 is renewing at 5.8% in 2025.
That’s not a bump — that’s a financial identity crisis.
Cash flow? Gone.
Investors? Underwater.
Developers? On the sidelines, red-lining pro formas and begging lenders to use a calculator with “developer mode.”
And all the while, OSFI sits up in their glass tower pretending this is fine because it’s “prudent.”
The Boomers Won’t Let This Market Crash — But They Also Won’t Let it Breathe
Let’s talk about the elephant in the bungalow: the boomers.
They’ve got:
The equity,
The votes,
And the politicians on speed dial.
They’re not about to let their $3.2M Lawrence Park sanctuary dip into the $2s.
So what do they do?
They don’t sell.
They take out a reverse mortgage.
They pass the house down to their kids with a warm “good luck, champ.”
Meanwhile, first-time buyers need to prove they’ve got a six-figure salary, perfect credit, and parents willing to co-sign — just to buy a 550 sq ft condo with no oven.
It’s madness.
We’ve created a market where only the wealthy and the wildly leveraged can participate, and the rest of the country is watching from the sidelines, screaming into the abyss:
“HOW DOES THIS MAKE ANY SENSE?!”
The Fix? Flexibility. Innovation. And a Government with a Spine.
Here’s what needs to happen — like, yesterday:
✅ Roll out 30- or 40-year amortizations for owner-occupiers.
✅ Make interest-only loans available to investors and developers — we’re the ones adding supply!
✅ Introduce longer fixed-rate options — we’re the only G7 country playing mortgage roulette every five years.
✅ Scrap the stress test on renewals — if someone’s made every payment for five years, give them a damn break.
Other countries do this.
We’re not reinventing the wheel — we’re asking for wheels at all.
Unless the plan is to see housing starts plummet and multigenerational households arguing over who left oat milk in the bathroom fridge.
Final Thought from The Assembly King
You can’t build modern housing on a mortgage system from the flip phone era.
Boomers are keeping this bubble from bursting, but they’re not letting it breathe either.
Canada needs to stop pretending this system works and start acting like a country that actually wants to house people, not just stress-test them into oblivion.
If we don’t evolve, we’re going to sleepwalk into a decade of low construction, low turnover, and a whole lot of politicians wondering why no one under 40 can afford to vote for them.
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Darryl "The Assembly King" Frankfort
Toronto Developer | Podcast Yeller | Shrubs Builder | Guy Still Waiting on Permits from 2022
Catch me live at 5PM — Mondays, Wednesdays, and Fridays — on The Frankfort Report, where real estate gets roasted and nothing is off-limits.