Durham Region Mortgage Blog

2025 Year-End Mortgage and Housing review

November 27, 2025 | Posted by: Sherry Corbitt

• After several aggressive rate hikes in prior years, 2025 saw a pivot: Bank of Canada (BoC) cuts Prime Rate 4 times in January, March, September and October. 
• As a result, mortgage rates — both fixed and variable — softened. We are ending the year with fixed rates around 4.3% and variable around 4.1% (depends on type of mortgage and may be lower). 
•  A lot of renewals - roughly 60% of outstanding mortgages are up for renewal between 2025–2026. Sherry's prediction? Lenders are swamped and clients are going to get frustrated with the service levels and response times - TIME IS YOUR FRIEND - start your renewal process early because those that leave it last minute will have limited choices. 
• On balance, the easing of rates offered some relief to borrowers — but high borrowing costs are still the “new normal,” and many Canadians continue to feel the pinch on affordability. 

• According to Canadian Real Estate Association (CREA), the resale housing market softened in 2025: national home sales were expected to decline by ~3.5%, to around 467,100 units.
• Still, by late 2025, there were early signs of stabilization, with some renewed demand — particularly among first-time homebuyers — as lower rates improved affordability. Sherry's prediction? People who have been sitting on the sidelines waiting to get into home ownership - now is your time! 
• Despite price softening in some markets and slower sales, many Canadians remained cautious: job market uncertainty, tighter lending standards, and elevated down payment requirements continued to weigh on buyer confidence.
• The outcome? A housing market that’s more subdued than past years — a pause rather than a rebound. It will be a long time before we see the highs of 2022 again. We are seeing appraisals come back lower than anticipated and some clients are having to renew with current lenders and not take out refinance funds if the equity isn't there. 

• Many lenders and economists expect mortgage rates to remain relatively stable through 2026. Sherry's prediction? No additional Bank of Canada rate decreases for the 1^st half of 2026. 
• According to CREA’s latest forecast at the start of 2025, national home sales are expected to rebound by up to 4.5% in 2026, with the average home price rising modestly (projected around a 3.3% increase - which is great to hear since pricing dipped this year). 
• Improved affordability — thanks to lower rates — could draw more first-time buyers or those who paused in 2025 back into the market. This may create upticks in demand, especially in more affordable regions outside of overheated urban pockets.
• For those currently renewing mortgages: if rates remain stable or edge lower, it could be a favourable environment to renegotiate, refinance, or consider variable-rate products — especially if you anticipate stable or improving economic conditions in 2026.
• But headwinds remain: affordability challenges, stricter underwriting, and the lingering impact of economic uncertainty (inflation, jobs, global trade) may continue to weigh on some buyers’ ability or confidence to purchase.

• If you’re renewing a mortgage in 2026: check if your current rate still makes sense — it may be time to shop around or renegotiate, given where rates are heading. Sherry's prediction? Clients will get frustrated with their current lenders due to the amount of mortgages coming due and the toll that takes on lender's manpower - more and more homeowners will benefit from working with a dedicated Mortgage Broker who can be their eyes and ears and negotiating expert when dealing with their renewals. 
• For buyers thinking of entering the market in 2026: the coming year could offer a “window of opportunity” — manageable rates, modest price growth, and potentially less competition than in boom years. Sherry's prediction? This isn't just for First Time Buyers, this is going to be an amazing opportunity for investors to become landlords and for families to buy a cottage or a 2^nd home for kids going to school. 
• If you’re a homeowner weighing refinancing or switching products: consider your long-term plans. Stability is still valuable; locking in a reasonable fixed rate might hedge against potential rate fluctuations or economic uncertainty.
• For investors or clients interested in real estate: 2026 could see regional shifts — more activity in markets outside expensive metro areas, as affordability becomes more important than “buying at all costs.”

Back to Main Blog Page

Share This Page On: