Will that faster, cheaper AI-approved mortgage be worth it?

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeReal EstateMortgagesWill that faster, cheaper AI-approved mortgage be worth it?Robert McLister: What is having a human on the other end of one of life's biggest transactions worth — and what does skipping one save? You can save this article by registering for free here. Or sign-in if you have an account.The mortgage business is about to get faster, cheaper and a whole lot less human, whether the industry is ready or not. Photo by Dragon Claws/Getty ImagesHow much extra would you pay for a mortgage approval in seconds rather than one or two days?Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorIt’s a question hundreds of thousands of Canadians will be mulling within a year or two.And we can credit artificial intelligence, which now lets lenders pull off feats that until recently were firmly in the “someday” column.Consider TD, for example. It reports doing all this — “classifying client documents, extracting key information, calculating client income and validating figures against select policy requirements, performing consent checks and searching for any discrepancies before generating a concise summary for underwriters” — in a tidy three minutes.That same process previously consumed 15 hours, the bank says.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againAnd it supposedly does it with more accuracy and sharper fraud detection than its human staff ever managed.Within a couple of years, AI may run nearly every step of the mortgage processing function while staff largely watch. Although, the sales function will continue to be dominated by humans for much longer.And TD is by no means alone. Every major lender is racing to teach machines to do mortgages, none keen to be last.It’s a tectonic shift that borrowers will feel in numerous ways, so here’s a taste of what’s coming.An easier application process with faster results strips away the friction that borrowers dread.Couple that with the fact that multiple credit pulls (by mortgage lenders) don’t hurt your credit score, says Equifax, and these points will encourage more applications.That, in turn, will fuel more shopping, since a firm approval in hand gives borrowers ammunition, making them more confident rate hagglers.Customers will say, “Hey, Mr. Lender, see? I just got approved 10 minutes ago for 0.10 per cent less at Competitor XYZ. Match it or I walk!”The headache will deepen for less tech-savvy lenders running rate specials, ones that unleash a flood of applications.Nowadays, such lenders can take weeks to issue approvals because they’re so backlogged, which is a ridiculous service level in 2026. Instant approvals will leave consumers far less tolerant of service that glacial.In short, with surveys showing interest rates are still the main reason borrowers switch lenders, AI could someday cause application cancellation rates to surge.Unconditional approvals will happen even quicker once lenders can:Pull data from borrowers’ bank accounts at other institutions (open banking will accelerate this over the next year or so)Draw income data from direct payroll connectionsGet income digitally verified by Canada Revenue Agency (assuming politicians push CRA to accelerate their dreadfully-overdue digital income verification project)Today, some lenders still win on speed.With AI, once instant approvals become a thing, far fewer will win on speed.Borrowers with non-standard applications — those with self-employed, gig, or commission income, or new-to-Canada borrowers with thin credit files — could benefit if new AI models incorporate alternative data more effectively.Alternative lenders who pounce on this trend — and do it with low arrears — will eventually build a name for themselves, both inside and outside of mortgage broker circles.If unconditional approvals with automated appraisals take seconds, that five-day financing condition in your offer may become needless.That could make for stronger offers, which is everything in a hot market.Mind you, unconditional approvals are harder with certain property types like condos, which entail condo document review and other due diligence.Instant lender decisions may also trigger a faster flood of offers and more instant competition for sexy listings. That might juice prices in a tiny handful of cases (hot properties, hot markets), albeit it’s hardly the stuff bubbles are made of.The pure transaction-processing function — i.e., helping you apply, collecting documents, submitting to lenders, chasing conditions, etc. — is exactly what AI compresses. Mortgage brokers who compete on logistical value face genuine displacement pressure.Smart brokers can and will add value in other ways: sharper advice on complex files, broader lender and product access, better negotiation and handling the cases that don’t fit AI models.However, even those aspects will be automated to a large degree. In reality, the only firms that can pull off an end-to-end digital experience and offer a wide array of lenders are not the banks, they’re high-tech brokers.That puts the traditional mom-and-pop broker — those reliant on customers who value face-to-face relationships more than speed and savings — in a shrinking pool.AI models will have to adapt to falling markets, overly frothy markets, and regional or sectoral employment risk. Otherwise, a downturn could send a bank’s losses through the roof.On top of that, human-rights and fair-lending laws mean “black box” declines could become a legal liability (say, if the algorithms quietly and systematically tag ethnic new immigrants in Brampton, Ont., as high-risk borrowers).No doubt, regulators will be demanding a window into banks’ model parameters.The mortgage business is about to get faster, cheaper and a whole lot less human, whether the industry is ready or not.And if you think about it, the question was never whether AI takes over, or even when.The real question is: What is having a human on the other end of one of life’s biggest transactions worth — and what does skipping one save?How much extra would you fork over to deal with a person rather than a machine on your next mortgage? $100? $1,000? $10,000?I can sit here and tell you that saving $2,000 or $3,000 on a cheaper rate could cost you five times that if you sign the wrong mortgage contract. But, ultimately, consumers will decide for themselves.Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.For the best national insured and uninsured mortgage rates, updated daily, please visit our mortgage rate page here. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.