Once a runaway train, Canada’s immigration-driven population growth has come to a grinding halt.

By Randy Thanthong-Knight

(Bloomberg) — Once a runaway train, Canada’s immigration-driven population growth has come to a grinding halt.

For the second straight quarter, the country’s population changed nominally, compared with a quarterly growth rate of nearly 1% last year, according to Statistics Canada data released Wednesday.

Tighter immigration rules aimed at reducing the number of temporary immigrants drove almost more people out than new arrivals and natural births, with an increase of 47,098 people or 0.1% in the second quarter, the data showed. That’s a similar gain to the first three months of this year — and, except for 2020, the lowest growth rate in a second quarter since comparable records began in 1946.

The government’s plan to reduce the temporary migrant population appears to being working. The number of non-permanent residents dropped for the third time in a row, reaching 7.3% of the total population in the quarter, versus 7.6% at its peak. The decrease was driven by foreign students and workers leaving the country.

With half a year of essentially no population growth, Prime Minister Mark Carney’s government must decide whether to keep its tight lid on inflows or bring in more workers. The country’s new immigration targets are due Nov. 1.

It will be the first target set under Carney, who promised to bring immigration rates to “sustainable levels.” At the same time, his government wants to build homes and infrastructure to boost activity in a tariff-hit economy. That plan will require more skilled workers in trades and construction — sectors that still face labour shortages.

U.S. policies on immigration may also influence movements across the northern border, with some refugees as well as H-1B visa holders potentially heading to Canada.

In order to increase the number of intakes, Carney — who inherited eroded public support for mass immigration — will have to restore public confidence in the system and rebuild consensus around welcoming newcomers.

Like many of its advanced economy peers, Canada needs immigration to grow its population and tax base in order to replace workers and support its aging population. International migration accounted for more than 70% of population growth in Canada between April and June. In the second quarter, the number of births exceeded deaths by 13,404, with immigration adding 33,694 people.

Tepid population growth already clouded the economic outlook. Bank of Canada Governor Tiff Macklem said last week, when he resumed cutting interest rates, that low population growth as well as a weak labour market will weigh on household spending — a rare bright spot in the economy that contracted sharply last quarter.

–With assistance from Mario Baker Ramirez.

©2025 Bloomberg L.P.

Oxford Economics says Canada’s economy will stay weak through 2025, with housing activity picking up but prices still expected to slide into 2026.

Oxford Economics expects Canada to remain on the edge of recession through 2026, warning that broad-based weakness across the economy shows little sign of easing.

The outlook was shared during the firm’s September Office Hours call, where economists pointed to persistent sluggishness across key sectors despite cooling inflation and recent rate cuts from the Bank of Canada.

Ongoing uncertainty around trade, a softening labour market and a housing market still searching for the bottom were flagged as key risks, with the path ahead also vulnerable to policy shocks such as the federal budget this fall.

Weak growth and a softening job market

Oxford Economics said the economy will “remain on the verge through the second half of 2025, teetering on recession,” with the Bank of Canada’s recent cut described as consistent with easing inflationary risks and faltering growth. Another reduction in October was noted as possible, though the outlook “is still subject to policy shocks,” including a fiscal boost anticipated in the federal budget this fall.

The firm now expects inflation to average 2.6% next year, down from earlier projections of 3%, while the labour market will continue to feel the strain. “We think there’s still a little bit of a hit coming to lift unemployment to 7.4%,” the call noted, though the rate should fall relatively quickly into 2026 as population growth slows.

The outlook pointed to a prolonged weak growth cycle. “Our outlook for the Canadian economy is not that optimistic — we expect to remain on the edge of recession into 2026, with overall growth close to zero,” Oxford said. Quarter-by-quarter gains are expected to come slowly, in the range of just one to three tenths of a percent.

Uncertainty over tariffs under USMCA was also cited as a risk. Until Canada secures a deal similar to those achieved by the UK or EU, the firm noted a cloud of uncertainty is expected to hang over tariff rates, dampening investment and related sectors.

Tentative housing rebound overshadowed by falling prices

Oxford Economics pointed to early signs of improvement in resale activity, noting “a pickup in sales and average prices in Toronto and Vancouver, and listings have also risen, so overall activity is starting to move a little bit.” However, benchmark prices — described as the stronger gauge — “have continued to drift lower.”

Further rate relief is expected to bring more buyers and sellers back into the market this fall, though the balance is likely to tilt toward a buyer’s market. “There will be a pickup in activity, but it will lead to prices drifting lower into 2026,” Oxford said.

Over the longer term, home prices are expected to rise only slightly faster than inflation. “We anticipate a housing market rebalance in the late 2030s, but over the next five to 10 years house prices will be largely flat in real terms,” the firm said.

Government ambitions tempered by structural limits

On the construction side, Oxford Economics is projecting limited momentum in the near term. “The next couple of months and quarters are not looking particularly good,” the firm noted, with a relative uptick expected only by late 2026. Even then, the baseline is described as low, and any rebound would resemble a return to balance rather than a boom.

Government ambitions add another layer of complexity, with Ottawa’s recently announced Build Canada Homes program calling for a near doubling of housing output through modular and mass-timber construction. But Oxford warned such targets risk overshooting. “We think the government’s plan to double housing supply overdoes it. We see housing starts peaking near the 300,000-unit range in the latter half of the decade. With changing factors including aging boomers selling homes, for example, we could face an oversupply situation by the end of the decade if that government plan comes true.”

For now, the Canadian economy appears set to remain in a holding pattern — not fully in contraction, but still far from a clear path to recovery. With tariffs in flux, inflation expected to tick slightly higher in the long term, and housing still adjusting, the market is shaped more by uncertainty than conviction.

This article was writtenf or Canadian Mortgage Trends by:

Not all “first-time buyers” are created equal. Here’s how the rules differ across Canada’s most-used programs.

If you’ve been poking around the idea of buying your first home in Canada, you’ve probably noticed that “first-time homebuyer” doesn’t always mean what you think it does. Different programs, federal and provincial, define it in different ways, and that can make things confusing fast.

We work with a lot of clients who get tripped up by this. Someone will tell me they’re a first-time homebuyer because they’ve never bought a home in Canada, only to discover their previous home in another country disqualifies them from a key benefit here. Or, on the flip side, someone who owned a condo years ago doesn’t realize they might still qualify for certain first-time buyer programs again under the right circumstances.

So let’s break it down. Here’s how “first-time homebuyer” is defined across three major programs Canadians often rely on: the Ontario Land Transfer Tax Rebate, the RRSP Home Buyers’ Plan (HBP), and the First Home Savings Account (FHSA).

How does Ontario define a first-time homebuyer for the land transfer tax rebate?

If you’re buying property in Ontario, the land transfer tax (LTT) rebate is probably the first program you’ll hear about. It can save you up to $4,000 on the provincial land transfer tax, and another $4,475 on the Toronto municipal land transfer tax if you’re buying in the city.

But the eligibility rules here are strict.

The never-ever rule

To qualify:

• You must be at least 18 years old
• You must have never owned a home or any interest in a home anywhere in the world
• You must live in the home as your principal residence within nine months of the purchase
• And, here’s the kicker, your spouse or common-law partner must also never have owned a home while you’ve been together

That last point trips up a lot of couples. If your partner owned a home before you got together, you’re in the clear. But if either of you owned a property while in a relationship with the other, even if it was overseas, you’re disqualified.

I’ve had to deliver that disappointing news more than once. It’s a harsh line, but that’s the rule.

Real estate lawyer Maria Berenbaum notes:

“The latest addition is that a purchaser must be either a Canadian Citizen or have Permanent Resident status. We had a file recently where spouses bought a house together- they are both first time homebuyers but she doesn’t have her PR yet so they got only half the rebate. Once she gets her papers she can apply for the rebate within 30 days of getting a confirmation of residency, very short window of opportunity.”

Maria went on to say she often hears comments like, “How would they know if I owned something back in X? The answer is all government agencies are inter-connected. Therefore, when they are applying for immigration and put in their application that they owned a home back home, it may trigger a re-assessment, together with penalties.”

How does the RRSP Home Buyers’ Plan define a first-time homebuyer?

The HBP is a popular option for buyers who want to tap into their RRSP savings, up to $60,000 per couple, to help with a down payment.

Thankfully, this program is more forgiving than the LTT rebate.

The four-year look-back rule

To qualify:

• You must not have lived in a home that you (or your spouse/common-law partner) owned in the current year or the four preceding calendar years
• You need a signed agreement to buy or build a qualifying home
• You must intend to make that home your principal residence within one year
• You must be a resident of Canada at the time of the withdrawal and when you buy the home

So yes, you can technically qualify again even if you’ve owned property before. As long as you (and your current spouse or partner) haven’t lived in an owned home in that four-year window, you may still be eligible.

I call this the “fresh start” clause. It’s particularly useful for people who sold a home years ago and have been renting since.

How does the First Home Savings Account define a first-time homebuyer?

The FHSA is the new kid on the block, and honestly, it’s a game-changer. It combines the tax perks of an RRSP and a TFSA, and lets you contribute up to $40,000 toward your first home purchase.

Similar to HBP, but tied to ownership and occupancy

To open and use an FHSA:

• You must be between 18 and 71 years old and a Canadian resident
• You must not have owned or jointly owned, or lived in, a qualifying home in the calendar year before you open the FHSA or during the previous four calendar years
• This rule also considers property owned by your spouse or common-law partner that you lived in

The FHSA’s definition of a first-time homebuyer is almost identical to the HBP’s, but there’s one nuance: the timing starts before the account is opened. That means you have to meet the definition at the time you open the FHSA, not just when you use it.

This is crucial. We tell our clients: if you’re even thinking about buying your first home in the next few years, open your FHSA sooner rather than later, even with a minimal contribution, to start that eligibility clock.

How do the definitions compare?

Let’s stack them side by side so you can see where things align, and where they don’t.

The key takeaway? The LTT rebate is the strictest. HBP and FHSA are more flexible, especially if you’ve taken a break from homeownership or recently separated from a partner who had a home.

Our advice

Don’t assume you are (or aren’t) a first-time buyer until we really look at the details. Each program plays by its own rules, and timing, relationship history, and past ownership all matter.

Here’s what we recommend:

• Talk to a mortgage expert early: They can walk you through each of these definitions based on your personal history
• Open your FHSA early if there’s any chance you’ll buy in the next few years. You’ll be glad you did
• Be honest with yourself (and your partner) about your ownership history, even that vacation property from 15 years ago might count
• Don’t leave money on the table. We’ve seen clients qualify for benefits they didn’t know they were entitled to, and others miss out because they made assumptions

Does first-time buyer status matter for mortgage purposes?

Actually, for an insured mortgage, it can matter if you are a first time homebuyer.

Repeat buyers are eligible for a 30-year amortization with mortgage insurance only when purchasing newly built homes.

First-time homebuyers are eligible regardless of whether they are buying a new or resale home.

Repeat buyers purchasing resale (existing) homes are not eligible for a 30-year amortization with mortgage insurance—the maximum remains 25 years in these cases.

Whether you’re buying your very first home or just your first in a while, knowing which programs you qualify for can save you thousands, and make your homeownership journey much smoother.

This article was written for Canadian Mortgage Trends by:

Ross Taylor

Ross Taylor is dedicated to empowering Canadians with financial literacy and expertise in housing, credit, and real estate. With over 20 years of experience as a mortgage broker, Ross has helped thousands of Canadians navigate the complexities of home financing and credit management. His passion for education drives him to demystify the mortgage process, ensuring clients make informed decisions. Discover more valuable insights and resources by visiting www.askross.ca/articles

Governor Tiff Macklem says the central bank will examine how its policies affect housing demand and affordability as part of its 2026 framework renewal.

The Bank of Canada will consider how its policies affect housing affordability as part of its next five-year monetary policy framework review.

In a speech delivered Tuesday in Mexico City, Governor Tiff Macklem said the Bank is preparing for its 2026 renewal by examining how monetary policy interacts with a housing market that has become increasingly unaffordable for many Canadians.

“Monetary policy cannot directly increase the supply of housing—that’s an issue for elected governments,” Macklem said. “But, through interest rates, monetary policy does have a direct effect on the demand for housing. And housing is a big part of the consumer price index in Canada, so the cost of housing affects inflation.”

“Therefore, it’s worth examining how monetary policy affects housing sector dynamics, and how best to factor housing affordability into our focus on overall price stability,” he added.

Macklem also hinted the Bank may revisit how it gauges underlying price pressures, suggesting the trim and median core measures could be reviewed. That comes as policymakers face more frequent supply shocks that can distort traditional readings of inflation.

Still, one element won’t change.

“As I said at the start of my remarks, there’s one key question we won’t be asking this time around,” Macklem said. “In our reviews since 1995, we’ve repeatedly asked whether 2% is the right target… Each time, we’ve concluded that targeting 2% inflation is the right framework for us.”

The Bank’s monetary policy framework is reviewed every five years in partnership with the federal government. The last review, completed in 2021, reaffirmed the 2% target and explored alternatives such as price-level targeting and nominal GDP targeting.

This article was written for Canadian Mortgage Trends by:

Canadians are increasingly counting on their homes to carry them through retirement, with many expecting to draw on property wealth through sales, downsizing or refinancing.

While homes have long been a source of wealth for Canadians, they’re now taking on an even bigger role in retirement planning.

New data shows 62% of adults view homeownership as central to their long-term security, with nearly half of unretired homeowners (44%) planning to sell their home to fund retirement, according to the 2025 Canadian Retirement Survey from the Healthcare of Ontario Pension Plan (HOOPP).

At the same time, concerns about mortgage debt are rising sharply as 65% of homeowners with a mortgage now worry they won’t be able to pay it off before retirement, up from 45% in 2023.

Homeowners more likely to save, but still worried

The survey also highlights the financial divide between homeowners and renters. Among unretired Canadians, 71% of homeowners said they have set aside money for retirement at some point, compared with just 36% of non-homeowners.

That disparity extends to total savings as well. Just 19% of homeowners reported having less than $5,000 set aside, compared with 57% of non-owners. By contrast, 18% of homeowners reported having over $200,000 in savings compared to just 3% of non-owners.

Despite this advantage, many homeowners remain uneasy about their retirement outlook, with 44% saying they are counting on the sale of their home to secure their financial future. That’s up from 42% in 2024 and 38% in 2023.

Another 33% say they are exploring remortgaging options in retirement to free up additional funds.

Other key findings

• 78% of mortgage holders said rising payments have forced or will force them to cut back in other areas just to keep up with housing costs.
• An equal 78% said higher mortgage payments are reducing their ability to save for retirement.
• Younger Canadians are especially likely to expect to rely on housing wealth, with 55% of those aged 18 to 34 planning to use the sale of their home to fund retirement (compared to 44% overall and 41% of those aged 55 to 64).
• 38% of homeowners said they would sell their home and downsize if they needed extra retirement income.
  • 24% said they would consider going back to work full- or part-time
  • 14% said they would use a reverse mortgage to stay in their home
• 46% of Canadians are concerned about mortgage, rent or other home payments in retirement.
• 48% of Canadians said they’re worried about what interest rates will do to their ability to afford current or future mortgage payments.
• 84% of renters said they are worried about the rising cost of rent.

This article was written for Canadian Mortgage Trends by:

From tax implications to AML compliance, here’s what borrowers need to know before turning digital wealth into a mortgage.

Crypto mortgages are becoming a hot topic in Canada, but there’s still a lot of confusion around how they work. For Canadians with significant holdings in Bitcoin, Ethereum, or other digital assets, the idea of using that wealth toward homeownership is appealing.

However, turning crypto into a viable down payment, or leveraging it as collateral, isn’t as simple as it sounds. Between tax implications, lender skepticism, and regulatory requirements, the path from digital wallet to mortgage approval requires careful planning and documentation.

Case studies: when crypto becomes a mortgage down payment

1) Recently, Brian Hogben of Mission 35 Mortgages worked with a client who had already converted cryptocurrency into Canadian dollars. The funds had been sitting in a bank account for over 90 days, typically enough to meet lender documentation standards.

The challenge was finding a lender, and more importantly, an underwriter, who understood crypto. Several major banks refused to proceed, despite the funds being seasoned and in fiat. Progress finally came through Bank of Montreal, which Brian explained has a specialized underwriting team familiar with crypto-related transactions.

After tracing the fund origins and confirming they were compliant with anti-money laundering (AML) standards, BMO approved the mortgage. It was a breakthrough, but it also highlighted how new and misunderstood crypto remains in the mortgage space.

2) A few years ago we ran into the exact same thing with clients purchasing a home in the Greater Toronto Area. They found us only one week before their closing date as their bank had withdrawn their mortgage approval. The reason was because the down payment was largely coming from digital wallets containing their crypto funds.

The only available solution was a private first mortgage, which we placed with Vault Mortgages. Everything went well, in spite of the tight timeline, and the buyers avoided losing their $250,000 deposit.

Interestingly, when they wanted to refinance within six months, they ran into the exact same problem. The banks still wanted to verify their down payment for the original purchase.

What is a crypto mortgage and how does it work?

Crypto mortgages typically fall into one of two categories:

• Crypto-funded mortgage: You sell your crypto, convert it to Canadian dollars, and use those funds as your down payment. This is more common but comes with tax consequences.
• Crypto-backed mortgage: You pledge your crypto as collateral without selling it. This may help you avoid triggering capital gains tax, but requires a lender capable of assessing and managing that risk.

How crypto-collateralized loans work

If you want to access liquidity without selling your crypto, a crypto-backed loan is another option. Here’s how it works:

1. Deposit crypto as collateral

You transfer your crypto to a platform, where it is held in a secure wallet or smart contract. Platforms such as YouHodler and Ledn support this model.

2. Loan-to-value (LTV) ratio

You can typically borrow between 30% and 70% of your crypto’s value. For example, pledging $10,000 worth of Bitcoin may get you a $5,000 loan.

3. Disbursement

Loans are issued in fiat (e.g., CAD, USD) or stablecoins. Most do not require a credit check and can be approved quickly.

4. Repayment and interest

Terms vary. Some platforms offer flexible repayment options; others require fixed schedules. Once the loan and interest are repaid, your crypto is returned.

5. Liquidation risk

If the value of your crypto drops and your LTV exceeds a certain threshold, you may be required to add collateral. Otherwise, your crypto may be liquidated.

6. No taxable event

Since you are borrowing, not selling, there is no capital gains tax event. This can be beneficial from a tax-planning perspective.

A simpler, safer alternative: using crypto ETFs for mortgage planning

For a more straightforward path, consider using crypto ETFs instead of direct crypto holdings. ETFs allow you to gain exposure to digital assets without managing wallets, keys, or exchange accounts.

Held through mainstream brokerages, including in TFSAs and RRSPs, crypto ETFs are easier for lenders to understand and verify, avoiding the friction that often comes with direct crypto assets.

Leading crypto ETFs in Canada

These are some of the top crypto ETFs available to Canadian investors:

• BTCC (Purpose Bitcoin ETF): The first Canadian Bitcoin ETF, with CAD and USD options and a carbon-neutral version
• BTCQ (3iQ CoinShares Bitcoin ETF): Physically-backed BTC, held in cold storage
• FBTC (Fidelity Advantage Bitcoin ETF): Designed for registered accounts
• ETHH and ETHX (Purpose and CI Galaxy Ethereum ETFs): Offer direct ETH exposure, with or without staking
• IBIT (iShares Bitcoin ETF): Managed by BlackRock, a major global asset manager

Several ETFs now include additional exposure to AI stocks or newer crypto assets like Solana, expanding diversification options within this space.

Naturally, our readers should NOT assume this to be investment advice. Ask your licensed financial adviser for their opinion before proceeding please.

Can I use crypto as a down payment?

Yes, but there are strict conditions:

• You must convert the crypto to Canadian dollars
• Maintain a documented paper trail of the sale and deposit
• Be prepared to explain the origin of your funds for AML compliance

Many lenders will still be hesitant. Working with a mortgage professional familiar with these requirements and a lender that understands crypto is essential.

Is it legal and safe in Canada?

Yes, but regulatory guidance is evolving. Lenders must comply with OSFI and FINTRAC standards, which include thorough AML and source-of-funds verification.

OSFI is expected to implement new digital asset rules in 2025, which may influence how Canadian financial institutions handle crypto-collateralized products.

Key risks to consider

• Price volatility: A drop in crypto value can lead to margin calls or liquidation
• Lender restrictions: Many banks still reject crypto-related funds
• Platform risk: Some crypto lenders have gone bankrupt
• No deposit insurance: Crypto held as collateral is not insured by CDIC
• Compliance complexity: Documentation, tax reporting, and regulatory scrutiny can be significant

Who offers crypto-backed loans?

The following platforms offer crypto-backed lending services:

• Ledn (Canada-based)
• APX Lending (Canada-focused)
• Binance
• Coinbase
• Crypto.com
• YouHodler
• SALT Lending
• Aave and Compound (DeFi protocols)

For Canadians, I am told Ledn and APX Lending provide the most relevant regulatory alignment.

How does CRA treat crypto in mortgage scenarios?

Under CRA guidelines, cryptocurrency is treated as a commodity. Selling it to fund a down payment is a taxable event, and any capital gains must be reported.

However, borrowing against your crypto is not a disposition and does not trigger capital gains taxes, at least under current rules. Regardless, thorough documentation is critical.

Our advice

Crypto-backed mortgages and crypto-collateralized loans offer new possibilities, but they’re not ideal for everyone. If you’re a crypto holder considering homeownership in Canada:

• Convert your crypto to Canadian dollars early, and let it season for at least 90 days
• Alternatively, accumulate your crypto wealth in Exchange Traded Funds
• Document everything: sales, transfers, deposits, and sources of funds
• Work with professionals who understand both traditional lending and crypto
• Be ready to meet rigorous compliance and verification requirements

Canada’s mortgage landscape is still catching up to the digital asset world. Planning ahead is key to avoiding delays or declined applications.

This article was written for Canadian Mortgage Trends by:

The rent-versus-buy debate has long divided financial experts and aspiring homeowners, with no clear winner in sight.

The traditional argument holds: While buying a home can build long-term equity and stability, renting can provide flexibility and fewer upfront costs. But as home ownership becomes a far-fetched dream for many young Canadians, can renting for life be a viable option?

Alex Avery, author of The Wealthy Renter, thinks so.

“It’s different for every person, and each individual’s needs change over time, but I’m still a firm believer that renting is a great option,” he said.

Despite rental prices having soared since publishing his book in 2016, Avery says renting is still cheaper and carries less risk than buying.

“People compare mortgage payments to monthly rental rates, but mortgage payments don’t begin to cover the full costs of home ownership,” he said. These costs can include notary fees, realtor commissions and region-specific taxes when purchasing the property as well as ongoing costs such as mortgage interest, property taxes, insurance, and various maintenance and repair expenses.

Avery was inspired to write his book during what he calls was a “speculative bubble” in the housing market at the time that he said created a perception of home ownership as an “easy out for savings,” especially in urban centres like Toronto and Vancouver.

“[Young Canadians] were being pressured to buy a condo when the math never made any sense,” he said.

Vancouver realtor Owen Bigland’s calculations paint a different picture however. With average monthly rent for a one-bedroom unit in his city now hovering around $2,800, a lifetime renter could spend at least $1.3 million by the time they’re 65 (not accounting for rent increases or inflation), according to Bigland.

“And you’ll have zero to show for it. Where’s the savings here?” he questioned.

Even if monthly rent was cheaper than a mortgage payment, Bigland said many Canadians will likely spend any savings rather than invest it and grow their wealth.

“A lot of Canadians don’t have the discipline to save as much as they should,” said Sebastien Betermier, an associate professor at McGill University who studies Canadian household spending.

With rents making up at least a third of household expenditures, and homes making up 70% to 80 % of homeowners’ wealth portfolios, Betermier says both renters and homeowners alike are exposing themselves to big risks.

Recent data from a survey by the Healthcare of Ontario Pension Plan and Abacus Data suggests the same. More than a third of Canadians report having less than $5,000 in savings, and those who own a home are increasingly relying on their home equity to fund their retirement.

Bigland preaches home ownership for this very reason. He encourages chipping away at your mortgage and building equity so you can benefit from any price appreciation in the future.

“The only real cash shelter we get in Canada is the principal residence exemption,” he said.

Put another way, “you’re essentially renting [the home] from yourself,” said Betermier. He adds that your home can act as collateral should you need to borrow against it someday. Most mortgages from big banks typically include a built-in home equity line of credit at a favourable rate, according to Bigland. “It’s accessible money without selling your home.”

Avery, however, doesn’t buy this argument.

“It presupposes that housing is a safer investment than other investments,” he said. “There are many places where house prices have gone down, where employment prospects change over time.”

As an alternative to relying on your home as an investment, Avery suggests putting your money into an RRSP, TFSA, and the FHSA which doesn’t necessarily need to go toward a home purchase. “You can learn about index ETFs too. There’s a lot of different ways to invest your money,” he said.

Avery, who’s gone the home ownership route himself, doesn’t think buying is a bad decision, but warns against it if you’re banking on it as an investment tool.

“That’s conflating two different objectives,” he said. “One is to house yourself, and the other is to generate wealth.”

But Bigland, who’s also written a book on real estate and stock investing, says you should be doing both. He agrees renting can make sense in some situations like if you’re anticipating a change in jobs, but you should consider buying if you can commit to a location for eight to 10 years.

He suggests first-time buyers start with older buildings close to public transit often sitting on valuable pieces of land. “You’ll probably have a developer [buy] in 10 or 15 years, and that might be your exit strategy,” he said. “Even if you’re a blue-collar guy, if you can get $40,000 down, maybe even forgo the car for a little while, you can do it.”

This article was written for Canadian Mortgage Trends by Cathy Miyagi.

Borrowers are caught in a mortgage rate market that changes by the week, with little sign of stability ahead.

With every passing week, the Bank of Canada faces conflicting economic signals, leaving Canadians guessing about its next move and triggering rapid changes in mortgage rates.

After several weeks with the lowest 5-year fixed rates holding above 4%, several lenders are now offering options in the high-3% range, generally for high-ratio borrowers.

“There was a two-month period where there were lots of rates available in the three’s … and then suddenly, everything headed for the fours over about a two-week period,” says Ron Butler of Butler Mortgage. “Then bond yields took a roughly 25 basis-point reduction, and now we’re back in this very aggressive state.”

Butler notes that while not every lender has followed suit, a number are again pricing select terms below 4% in the past few days, a trend that could just as easily swing back.

“Every single news item to do with interest rates, both here and in the United States, can trigger a change in bond yields and rates,” Butler says. “What we urge people to understand is that it is that volatile; rates can all go back into the fours very soon.”

Conflicting economic signals

The current volatility isn’t driven solely by the trade war and uncertainty over long-term policy, though both play a role.

According to rate expert Ryan Sims of TMG, the market is still trying to figure out how past changes to trade policies and leadership regimes are affecting both Canada and the United States.

“We’ve got two opposing forces right now and the bond market is reacting to every single report,” he says. “You’ve got inflation in Canada slowly creeping up bit by bit, but then you’ve also got the horrible jobs numbers we saw last week.”

High inflation typically pushes the Bank of Canada to raise rates, while weak employment and a slowing economy point to cuts. What’s unusual now is that both forces are appearing at once, Sims says.

Further complicating the matter is the American economic picture, which directly influences Canada’s 5-year bond yield, and with it, fixed mortgages. Though there are some cracks starting to form, the U.S. economy appears to be outpacing expectations.

“Whether you agree with the current administration or not, the data is coming in strong — employment is healthy, GDP is growing at a good clip, inflation is fairly malignant right now — so I don’t think you’ll get the rate cut from the U.S. Fed that everyone was banking on this year,” Sims explains. “It’s a lot harder for the Bank of Canada to cut when the U.S. Fed isn’t cutting.”

Even as the Bank of Canada shows little inclination to cut its policy rate, which drives the prime rate and variable borrowing costs, Canada’s big banks have been lowering mortgage rates after earlier hikes to win over renewers in a slow market.

Sims therefore advises clients to use this competitiveness to their advantage. “I’m telling clients to call their bank and say, ‘I’m working with a broker, I’m actively shopping, give me the best possible deal you can; you get one opportunity,’” he says.

The best options for borrowers right now

With the market shifting every few weeks and little clarity on its longer-term direction, experts advise borrowers to base decisions on their own risk profiles.

“I prefer the variable, and the only reason is because I have a free option to lock in at any point in time should I want to do that,” Sims says. “If I see that inflation is not letting down and I need to lock in, I can do that, but if I lock in now and rates plummet, I’m facing high [prepayment] penalties.”

The variable option, Sims adds, could offer more flexibility if Canadians face widespread job losses or economic stress in the coming years, challenges that may be tougher under a fixed mortgage.

However, Robert McLister, a mortgage strategist at MortgageLogic.news, cautions that only those prepared to monitor the markets closely and act quickly should consider a variable rate in today’s environment.

“Unless you’re bulletproof financially and need shorter-term penalty flexibility, go easy on variables,” he advises. “If you model out their performance using today’s rates and forward rate projections, their performance edge is limited for most people. Add in the real dangers of inflation and Ottawa’s fiscal mismanagement, and their appeal shrinks further.”

Instead, McLister recommends a fixed-rate mortgage of three or five years for most, or a hybrid option for those with a little bit more appetite for risk.

“Get a sufficiently long rate hold if you’re home shopping or refinancing,” he adds. “The point is: don’t bet the ranch on much more [interest rate] relief from here.”

This article was written for Canadian Mortgage Trends by:

The Canadian Real Estate Association says home sales in July rose 6.6% compared with a year ago, continuing an upward trend after the market had slowed in previous months.

A total of 45,973 homes changed hands last month, up from 43,122 in July 2024.

Home sales rose 3.8% on a month-over-month basis from June, with transactions up a cumulative 11.2% since March.

“With sales posting a fourth consecutive increase in July, and almost four per cent at that, the long-anticipated post-inflation crisis pickup in housing seems to have finally arrived,” said CREA senior economist Shaun Cathcart in a press release.

“Looking ahead a little bit, it will be interesting to see how buyers react to the burst of new supply that typically shows up in the first half of September.”

The association said the bump in sales activity was led overwhelmingly by the Greater Toronto Area, where transactions have now rebounded a cumulative 35.5% since March.

TD economist Rishi Sondhi said “pent-up demand temporarily sidelined earlier in the year returned to markets with some force last month.”

“Indeed, it looks as though the sales recovery that should have happened earlier in the year after significant (interest) rate relief in 2024 was simply delayed some months,” he said in a note.

“Some reduction in economic uncertainty should bring back more buyers in B.C. and Ontario, while further Bank of Canada rate relief could offer modest stimulus in the back half of the year. However, barriers remain, such as stretched affordability in several provinces and a weaker job market.”

Meanwhile, new listings were up 0.1% month-over-month.

There were 202,500 properties listed for sale across Canada at the end of July, up 10.1% from a year earlier and in line with the long-term average for that time of the year.

The actual national average sale price of a home sold in July was $672,784, up 0.6% from a year ago.

CREA’s own home price index, which aims to represent the sale of typical homes, was unchanged between June and July 2025.

BMO senior economist Robert Kavcic said the housing market has looked “very balanced and stable” through the summer, with significant regional variation persisting.

“At the national level, sales have steadily climbed back toward longer-term norms, inventory is elevated but not overly saturating the market, and prices are effectively flat,” he said in a note.

“In markets where price corrections are ongoing, we seem to be getting closer to levels that are bringing some buyers off the sidelines.”

This article was written for Canadian Mortgage Trends by Sammy Hudes

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

While some elements of US trade policy have started to become more concrete in recent weeks, trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable. Against this backdrop, the July Monetary Policy Report (MPR) does not present conventional base case projections for GDP growth and inflation in Canada and globally. Instead, it presents a current tariff scenario based on tariffs in place or agreed as of July 27, and two alternative scenarios—one with an escalation and another with a de-escalation of tariffs.

While US tariffs have created volatility in global trade, the global economy has been reasonably resilient. In the United States, the pace of growth moderated in the first half of 2025, but the labour market has remained solid. US CPI inflation ticked up in June with some evidence that tariffs are starting to be passed on to consumer prices. The euro area economy grew modestly in the first half of the year. In China, the decline in exports to the United States has been largely offset by an increase in exports to the rest of the world. Global oil prices are close to their levels in April despite some volatility. Global equity markets have risen, and corporate credit spreads have narrowed. Longer-term government bond yields have moved up. Canada’s exchange rate has appreciated against a broadly weaker US dollar.

The current tariff scenario has global growth slowing modestly to around 2½% by the end of 2025 before returning to around 3% over 2026 and 2027.

In Canada, US tariffs are disrupting trade but overall, the economy is showing some resilience so far. After robust growth in the first quarter of 2025 due to a pull-forward in exports to get ahead of tariffs, GDP likely declined by about 1.5% in the second quarter. This contraction is mostly due to a sharp reversal in exports following the pull-forward, as well as lower US demand for Canadian goods due to tariffs. Growth in business and household spending is being restrained by uncertainty. Labour market conditions have weakened in sectors affected by trade, but employment has held up in other parts of the economy. The unemployment rate has moved up gradually since the beginning of the year to 6.9% in June and wage growth has continued to ease. A number of economic indicators suggest excess supply in the economy has increased since January.

In the current tariff scenario, after contracting in the second quarter, GDP growth picks up to about 1% in the second half of this year as exports stabilize and household spending increases gradually. In this scenario, economic slack persists in 2026 and diminishes as growth picks up to close to 2% in 2027. In the de-escalation scenario, economic growth rebounds faster, while in the escalation scenario, the economy contracts through the rest of this year.

CPI inflation was 1.9% in June, up slightly from the previous month. Excluding taxes, inflation rose to 2.5% in June, up from around 2% in the second half of last year. This largely reflects an increase in non-energy goods prices. High shelter price inflation remains the main contributor to overall inflation, but it continues to ease. Based on a range of indicators, underlying inflation is assessed to be around 2½%.

In the current tariff scenario, total inflation stays close to 2% over the scenario horizon as the upward and downward pressures on inflation roughly offset. There are risks around this inflation scenario. As the alternative scenarios illustrate, lower tariffs would reduce the direct upward pressure on inflation and higher tariffs would increase it. In addition, many businesses are reporting costs related to sourcing new suppliers and developing new markets. These costs could add upward pressure to consumer prices.

With still high uncertainty, the Canadian economy showing some resilience, and ongoing pressures on underlying inflation, Governing Council decided to hold the policy interest rate unchanged. We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs related to tariffs and the reconfiguration of trade. If a weakening economy puts further downward pressure on inflation and the upward price pressures from the trade disruptions are contained, there may be a need for a reduction in the policy interest rate.

Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases from tariffs and trade disruptions are passed on to consumer prices; and how inflation expectations evolve.

We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.

Information note

The next scheduled date for announcing the overnight rate target is September 17, 2025.

This article was releasted on the Bank of Canada website.