Introduction: A Lender Who Goes the Extra Mile
In the Canadian mortgage industry, the alternative lending space can feel like the wild west — dozens of MICs, private lenders, and hybrid products competing for broker attention. But every so often, you encounter someone who cuts through the noise with clarity, integrity, and genuine passion for helping brokers succeed. Colin Johnston, Managing Director of Vault Mortgage, is that person.
In this episode of the Behind the Lender series, Colin sits down with the ABW team to share his unconventional journey through the mortgage industry, break down what makes Vault Mortgage different, and deliver hard-won wisdom for brokers at every stage of their career — from brand-new agents figuring out the alt space, to seasoned professionals who may have lost their footing in a difficult market.
From Golf Course to Managing Director: Colin's Unconventional Journey
Colin's path into the mortgage industry is anything but conventional. It started in 1994 — on a golf course, of all places — when a chance conversation led him into the world of finance companies, which at the time were a major force in both the mortgage and unsecured lending spaces.
Over the decades that followed, Colin built a career that spanned virtually every segment of the Canadian mortgage market:
- Running a division of HSBC Finance in British Columbia during the subprime era
- Serving as VP of CHIP Reverse Mortgages and spending eight years in the reverse mortgage space
- Being one of three people involved in launching Manulife Bank into the broker channel
- Eventually co-founding and leading Vault Mortgage — now over four years old and growing rapidly
That breadth of experience — A lending, B lending, private, and reverse — gives Colin a perspective few in the industry can match. And it's a perspective he brings to every broker conversation, every file triage call, and every partnership he builds.
"I've done A, I've done B, I've done private, I've done reverse. I just know a little bit of everything. I find helping brokers put deals together and find solutions very interesting."
— Colin Johnston, Managing Director, Vault Mortgage
Why Every Broker Should Be Playing in the Alt Space
One of the most important themes in this conversation is the growing necessity of alternative lending knowledge for Canadian mortgage brokers. For years, many brokers wore "I only do A deals" as a badge of honour. Colin challenges that mindset directly — and not without empathy.
He compares it to a realtor who only sells luxury homes and refuses to work with anything under $2 million. The market simply doesn't work that way, and neither does a sustainable brokerage. As Dean notes, alternative deals now represent 30–35% of total volume at A Better Way Mortgage Group — and that number has grown substantially over the last 18 to 24 months as competitive bank rates made prime renewals harder to win.
The issue isn't ethics — Colin is quick to point out that there is nothing inherently unethical about alternative lending. The real barrier is often a lack of education and, frankly, motivation to learn a new space. But the market is now forcing brokers to evolve or risk falling behind.
Colin's insight from his Manulife Bank days illustrates the stakes clearly: incredibly strong clients — self-employed individuals with solid net worth, clear ability to pay, and coherent exit plans — were being turned away by banks because their income wasn't structured in a bank-friendly way. Many of those clients were being funnelled into pure private at rates far higher than their profiles warranted. The gap between that private pricing and true bank qualification was exactly what inspired the creation of Vault's near-B product.
The Vault Near-B Product: Filling the Right Gap
Vault Mortgage's flagship product in British Columbia is its near-B offering — and it's not a product that competes with pure private lenders. It competes with B lenders.
Here's what that means in practice:
- Designed for strong clients who don't debt-service at banks — primarily self-employed borrowers
- Clients who could qualify at a B lender but don't want to endure the document-heavy, time-consuming B underwrite
- Pricing consistently in the fives, with fully open products
- Approvals on most near-B files in four hours or less
- A full, transparent rate sheet — a rarity in the private lending world
Colin is emphatic about where Vault sits: they are not a last-resort lender. They are a solution for capable people caught in a structural gap — those whose income is declared in tax-efficient ways that banks can't accommodate, or whose timeline won't support a lengthy B lender process.
This positioning gives brokers a powerful tool when presenting options to clients who may be emotionally attached to the idea of being an "A client." As Colin frames it, the near-B option lets brokers present two doors:
- Door A: A longer process, more documents, potential frustration — and maybe 50 basis points saved
- Door B: An approval in two hours, a fully open product, and pricing that in some cases is lower than what a B lender would offer
"It's not for me to tell brokers they should be doing near-B. It's actually for the client to make a choice. Here's door A. Here's door B. Which one do you want me to take?"
— Colin Johnston
Institutional Capital: Why It Matters for Pricing and Renewals
One of the most eye-opening segments of this episode is Colin's explanation of how Vault's capital structure differs from traditional Mortgage Investment Corporations (MICs) — and why that difference matters enormously to brokers and their clients.
Vault operates with institutional capital as its primary funding source, supplemented by a MIC for deals that don't fit the institutional model. This structure creates three critical advantages:
- Pricing consistency: Vault's rates don't fluctuate based on the amount of capital deployed. MICs sitting on excess capital often need to lower rates to attract deals, then raise them at renewal when conditions change — sometimes by 3–4%.
- Availability: During the past few years, even well-established MICs ran out of capital. Vault's institutional backing means brokers don't face sudden funding gaps.
- Transparent renewals: If a client stays within the same loan-to-value family, they receive the same prime-plus pricing at renewal. No surprises. No bait-and-switch.
Colin addresses the MIC renewal problem head-on — not to criticize MICs, but to help brokers understand the structural reality. A MIC that can't predict its own cost of capital simply cannot promise renewal pricing. That's not necessarily unethical; it's just the nature of the model. But for brokers, it creates a real risk: a client placed at a promotional rate today could face a renewal offer that's 4% higher, and by the time you factor in legal fees, appraisals, and new lender fees, getting them out isn't viable.
"If they're in the same loan-to-value family they were in the previous year, we give them the same prime-plus. It's very, very transparent because our capital is different."
— Colin Johnston
The Exit Strategy Reality Check
Colin and the ABW team have a frank conversation about exit strategies — and what they actually look like in 2025 and 2026. For years, brokers could put "will refinance to A in 6 months" in their submission notes and move on. That era is over.
Colin is candid: the only exit plan he fully believes in right now is a properly priced sale. And even that requires scrutiny. Vault's underwriting team looks at listing history and market data. If a property has been listed for $2.4M for nine months and the market is saying it's worth $1.8M, that's not a viable exit — and the broker and client need to hear that clearly.
The implications for brokers are significant. If you promise a client they'll be in A lending in six months, and they do everything you tell them to do, and you can't deliver — there's a potential claim coming. Overcommunication, realistic planning, and honest conversations are no longer optional. They're professional obligations.
Colin's underwriting and BDM team actively helps brokers set these expectations — not to be difficult, but because the only way everyone wins is if the client wins.
How to Package a Deal for Vault
For brokers new to Vault — or those looking to sharpen their submissions — Colin offers clear, practical guidance:
- Always submit electronically through Velocity. Do not email client credit bureaus or BCC multiple lenders on a submission. This is a compliance and data security issue, and it signals to lenders that you're shotgun-sending rather than thoughtfully placing.
- Call before you submit if you're unfamiliar with the rate sheet. Colin and his team answer every call and return every missed call. A 5-minute conversation can prevent a mispriced quote to your client.
- Read the full rate sheet. Beacon-based pricing sits at the top, but yield adjustments for condos, rentals, and higher LTV bands are further down — and brokers frequently miss them.
- Include broker notes and a credit bureau. That's really what Vault needs to get started. An overly detailed executive summary from a previous B lender submission isn't a problem, but it's not necessary either. Vault's underwriters are trained to extract what's relevant and call the broker for the rest.
- Acknowledgement within 10 minutes. Vault's underwriting team confirms receipt of every file by phone or email within 10 minutes and provides an approval timeline. Before issuing approval, they call the broker to confirm pricing and ask: "Can you sell this to your client?"
Building Your Lender Network: Advice for New Brokers
Colin's advice for brokers new to the space is refreshingly focused. Instead of trying to learn every lender in the market, he recommends a deliberate and relationship-driven approach:
- Two or three bank lenders recommended by your brokerage
- One or two monoline lenders
- A couple of B lenders
- Two or three alt/near-B lenders
- Two or three pure private lenders
Then — and this is the key — meet the BDMs, learn their policies inside and out, and become an expert on those products. Ask BDMs not just about underwriting guidelines, but about how to position and sell their products to clients. That kind of conversation energizes BDMs who spend most of their day fielding rate quotes, and it builds the kind of relationship that gets your calls answered first.
For new brokers especially, Colin echoes advice that has stood the test of time: five quality conversations a day with people who have the ability to refer you business. Be patient. Don't be hard on yourself. The brokers who use this challenging market as a learning moment will come out the other side formidably equipped.
The Accountant Referral Opportunity: An Untapped Gold Mine
One of the most actionable segments of this episode is the discussion around accountants as referral sources — a COI category that is massively underutilized in Canadian mortgage brokering compared to the U.S. loan officer market.
The logic is compelling: the majority of Vault's near-B borrowers are self-employed. Their income is often structured for tax efficiency — declared lower on paper because an accountant designed it that way. A broker who understands this isn't just better at placing the deal; they're speaking the same language as both the client and the accountant.
Key insights from Colin and the ABW team on working with accountants:
- Target boutique firms and sole proprietor accountants — not large corporate firms like MNP, whose partners are unlikely to cross referral lines due to bureaucratic constraints.
- Don't lead with mortgages. Lead with their pain points. If you can take a problem off an accountant's desk — one they don't know how to solve and don't have time for — you become an indispensable resource.
- Respect the relationship. Make it clear you will never give tax or income advice. That's their domain. You're partners, not competitors.
- Look in your existing book. Every client you have also has an accountant. Ask for introductions. You may start hearing the same name repeatedly — and that's your highest-value target.
- Use LinkedIn. Search for tax strategists in your local market. Or use AI tools to build a call list in minutes.
Referrals from accountants, like those from financial planners, come pre-sold. There's no shopping. These clients already trust the person who referred them, which means they trust you by extension. The compounding effect of a single strong accountant relationship — through a client base of self-employed individuals who network with other self-employed individuals — is enormous.
Market Outlook: What Colin Is Watching
Colin closes the conversation with candid observations about where the market is headed:
- Small developers are under serious pressure. Colin is seeing complex files from small developers already in private lending, whose lenders won't renew. He doesn't do those files, but he's watching this segment closely and is concerned about what happens as those situations deteriorate further.
- The pre-sale condo situation is stabilizing — fewer desperate situations than six months ago — but Colin doesn't believe the condo market has found its bottom yet.
- Single-family sellers are starting to blink. After months of holding firm on prices, some sellers are accepting significantly less than their original asks.
- Vault is expanding into Alberta, with licensing expected to finalize in October 2025. Ontario growth continues to be strong, with differentiated pricing and product structures for that market.
- Business loans are coming to the broker channel. Vault's successful unsecured business loans division — designed for self-employed borrowers and business owners with shorter-term capital needs — is being prepared for broker distribution. This is a natural complement to the mortgage business and a significant opportunity for brokers serving entrepreneurs.
Key Takeaways
- The alternative space is no longer optional for Canadian mortgage brokers — it's a competitive necessity.
- Vault Mortgage's near-B product fills a critical gap between pure private rates and B lender timelines for strong, self-employed borrowers.
- Institutional capital gives Vault pricing consistency and renewal predictability that MICs structurally cannot always guarantee.
- Exit strategies must be realistic, client-facing, and honestly communicated — not just filler in submission notes.
- The best broker-lender relationships are built on trust, partnership, and a shared commitment to the client's outcome.
- Accountants — particularly boutique tax strategists — represent one of the most underutilized referral sources in the Canadian broker market.
- New brokers should focus on depth over breadth: master a small number of lenders and build real relationships with their BDMs.
- Always submit electronically, never BCC multiple lenders, and call to confirm pricing before quoting a client.
Why You Should Listen to This Episode
Whether you're a broker new to alternative lending, a seasoned professional looking to sharpen your alt strategy, or a team lead trying to build a more resilient book of business, this episode delivers. Colin Johnston doesn't product-dump. He educates, challenges assumptions, and offers the kind of straight talk that only comes from someone who has seen every corner of this industry.
This is the Behind the Lender series at its best — real conversations, real insights, and real tools you can put to work immediately.
Stay Connected
Subscribe to The ABW Tuesday Mortgage Memo for weekly insights delivered straight to your inbox.
Interested in joining a network that helps you grow? Learn more about A Better Way Mortgage Group and discover how we can help you build a better brokerage.