- \n
- Read: <\/strong>Why a Higher Minimum Wage Still Won\u2019t Pay the Rent in 51 Canadian Cities<\/strong><\/a><\/li>\n<\/ul>\n\n\n\n
Penelope Graham, mortgage expert at Ratehub.ca<\/a>, says trade negotiations will play a role in determining which direction rates head next year. \u201cThe 2026 rate outlook is less certain; the risks from the evolving trade scenario still present inflation headwinds, especially if CUSMA is not renegotiated in Canada\u2019s favour,\u201d says Graham. \u201cThe chance that rates could point higher again in the latter half of the year is a possibility that can\u2019t be ruled out.\u201d<\/p>\n\n\n\n
Pent-Up Demand Should Increase Housing Activity Next Year<\/h1>\n\n\n\n
September housing data from the Canadian Real Estate Association (CREA)<\/a> showed that although sales growth slowed from August, it was the busiest September for sales since 2021. The Toronto Regional Real Estate Board (TRREB)<\/a> released similarly optimistic numbers, with September sales for the region up 8.5% from 2024 and 7.3% from August. <\/p>\n\n\n\n
This is a promising sign that buyer confidence is slowly returning. As long as borrowing costs remain stable and economic uncertainties ease, momentum should continue to build for a housing market recovery in 2026. <\/p>\n\n\n\n
Additionally, responses from a Zoocasa survey<\/a> conducted earlier this year indicated that more affordable housing options would make prospective homebuyers more confident that they could afford a home. Fortunately, in several major markets, like Vancouver, Calgary, Toronto, and Hamilton-Burlington, average home prices are seeing year-over-year drops. This could further fuel a return from sideline buyers in 2026. <\/p>\n\n\n\n
![\"A](\"https:\/\/www.zoocasa.com\/blog\/wp-content\/uploads\/2025\/10\/image-5.png\")
<\/figure>\n\n\n\nWhat\u2019s Happening with Mortgage Rates<\/h1>\n\n\n\n
As Graham explains, expectations that the U.S. Federal Reserve will also cut rates this week \u2014 in turn pulling down Canadian bond yields \u2014 have helped keep borrowing costs low.<\/p>\n\n\n\n
\u201cAlready, lenders have responded, with the lowest five-year fixed insured mortgage rate now at 3.79%<\/a> \u2014 just nine basis points higher than the lowest variable-rate option,\u201d says Graham. She advises anyone currently rate shopping to lock in a pre-approval rate in order to preserve both current rate discounts and spread to prime. <\/p>\n\n\n\n
- \n
- Read: <\/strong>Here\u2019s Where Condo Prices Dropped the Most in 2025<\/strong><\/a><\/li>\n<\/ul>\n\n\n\n
Based on the average home price of $676,154, the average mortgage payment comes out to $3,229, assuming the minimum down payment, a 25-year amortization, and a 5-year variable rate of 3.79%. <\/p>\n\n\n\n
On the other hand, fixed-rate mortgage holders will pay an average of $3,480 for the same home (assuming a 5-year fixed rate of 3.79%). While variable-rate holders will currently benefit from lower monthly payments, if the Bank of Canada reverses course and raises rates in the future, payments could suddenly increase. Fixed-rate mortgage holders have the benefit of stability, which can help with long-term financial planning. Ultimately, the choice between a fixed or variable rate depends on your personal risk tolerance and financial situation. <\/p>\n\n\n\n
Considering a move this year? It doesn\u2019t hurt to start looking. <\/a>Browse thousands of listings on Zoocasa<\/a> and explore what\u2019s possible in today\u2019s market.<\/p>\n","protected":false},"excerpt":{"rendered":"
Today, the Bank of Canada lowered its overnight lending rate for the fourth time this year, bringing the rate down by 25 basis points to 2.25%. Hotter-than-expected inflation data and trade uncertainties contributed to the Bank\u2019s decision. Since January, the overnight lending rate has dropped by a total of 100 basis points. However, some economists […]<\/p>\n","protected":false},"author":132,"featured_media":39446,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"format":"standard"},"jnews_primary_category":[],"footnotes":""},"categories":[196],"tags":[],"class_list":["post-39444","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-of-canada"],"yoast_head":"\n
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- Read: <\/strong>Here\u2019s Where Condo Prices Dropped the Most in 2025<\/strong><\/a><\/li>\n<\/ul>\n\n\n\n