A new snapshot from TD’s U.S. retail bank shows homeowners delaying moves and leaning on home equity products as rate uncertainty persists, with 74 percent planning to stay put over the next two years and 58 percent citing their existing loan rate as a key factor, reinforcing how balance sheet mix will matter more than volume alone if margins compress with further policy easing, a dynamic that connects directly to domestic rate settings as the Bank of Canada’s policy rate sits at 2.5 percent as of September 17, 2025. See the survey detail and timing in a new TD Bank release and the policy rate trail on the Bank of Canada site for context. Branches still drive deposit stickiness in many markets.
Quantify retail mix shifts
In practical terms, more homeowners drawing on HELOCs and home equity loans can support fee income and average asset yields even as resale activity stays muted, because equity taps are often variable rate and price off short-term benchmarks that reset quickly as central banks move. It is telling that the survey reports 30 percent current usage of home equity products, with perceived benefits including lower rates than other credit and debt consolidation, while rate-sensitive Canadians are watching the domestic path after successive cuts to 2.5 percent, which could pressure deposit betas and compress spreads if deposit pricing lags but loan yields reprice downward faster across prime-linked books as competition intensifies in secured lending. The message is clear. “Engaging with a mortgage professional allows homeowners to gain a more comprehensive understanding of how to utilize their home equity,” said Jon Giles.
Track capital and credit signals
Against this backdrop, TD’s Q3 2025 print showed a Common Equity Tier 1 ratio of 14.8 percent and a stable Canadian P and C net interest margin of 2.83 percent, while provisions for credit losses in the Canadian bank rose modestly year over year, reflecting consumer credit migration that has been manageable to date.
The U.S. Retail segment is still absorbing governance and control investments, including expected U.S. BSA and AML remediation and related costs of approximately 500 million U.S. dollars in fiscal 2025, and management continues to work through a balance sheet repositioning that reduces lower yielding securities and some non core loans, all of which moderates near term net interest income but aims to improve run rate profitability from 2026 as funding and asset yields reset. Watch the efficiency ratio trend. These capital and credit markers, combined with rising homeowner use of equity products, point to a near term mix where secured consumer balances matter as much as growth, so monitoring PCL build and impaired trends by product is central to underwriting risk over the next two quarters.
Manage physical risk to reduce downtime
Operational resilience also came into view today through a completed flood mitigation project at a TD location in Florida using custom panels to shield entryways and an exterior ATM, a small example of how physical risk adaptation reduces business interruption and equipment loss during severe weather. For federally regulated institutions, these actions align with OSFI’s Guideline B 15 that requires banks to integrate physical and transition climate risks into governance, risk measurement, and disclosure, and the March 7, 2025 update sharpened expectations and data collection that will make ad hoc adaptations less optional over time as standardized reporting lands across the sector.
The cost of downtime is real. “Flooding can do far more than damage property,” said Stephen Gill. For investors, the link is straightforward, fewer service disruptions mean steadier fee capture, better customer satisfaction metrics, and lower incident remediation expense, which supports operating leverage as rates drift lower and volume-led revenue tailwinds remain uncertain.
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