Canada's largest bank saw a 40% decline in mortgage origination in the first quarter, according to what was revealed in the first quarter earnings talk.

CEO Dave McKay said: "While mortgage origination activity slowed from recent high levels, it remained in line with pre-pandemic levels."

He pointed out that the slowdown in activity was met with retention rates of about 90% and mid-term attrition rates at their lowest in 5 years.

Adding, "Looking ahead, we still expect annual mortgage growth to slow to a single-digit average, due to deteriorating affordability."

Of the transactions made, only 15% of mortgage borrowers chose a variable rate, according to the bank.

Neil McLellan, Group Head of Personal and Commercial Banking, said: "It’s not surprising that we see the percentage of [variable rate mortgage] facilities really declining, actually dropping to 15% of the assets."

Adding, overall, about a third of RBC's $365 billion mortgage portfolio is a variable rate product.

McLellan added: "We are seeing a very dramatic shift there," saying that the change in mortgage product preference has become more apparent among first-time buyers.

Explaining, "You can imagine, [variable rate] is not a product that first-time homebuyers would buy."

He also commented on the debt variable rate mortgage holders who continued to reach trigger rates after the last interest rate increase at the Bank of Canada in January.

He said the trigger rate is the point at which the borrower’s monthly payment no longer covers the increasing interest costs, and it particularly applies to fixed payment variable rate mortgages.

McLellan noted: "We have seen a large portion of that variable rate portfolio go through this process around trigger rates."

Adding, "Older cohorts that went through it experienced bigger increases. Those that were more recent had smaller increases." And while delinquency rates among borrowers with variable rates were lower than those with fixed-rate mortgages, RBC has now begun to see an increase in these delinquencies.

McLellan also said: "We are starting to see them move to the middle," adding that RBC continues to reach out to these clients.