Canada’s housing market continues to evolve, shaped by high borrowing costs, shifting buyer behaviours, and a slow return to balanced market conditions. While home prices in some provinces are holding firm or climbing, others are seeing more volatility as affordability challenges persist.

With interest rates still elevated and uncertainty around the Bank of Canada’s next moves, Canadians are cautiously navigating both housing supply issues and the cost of financing.

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Key Takeaways

• Many Canadians expect home prices to increase. 
• 35% of non-owners believe they will never buy a home.
• 68% of Canadians say they are somewhat likely or very likely to use a mortgage broker for their next mortgage.

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National Housing Snapshot

According to the Mortgage Professionals Canada 2025 State of the Housing Market Report, which surveyed 2,000 Canadians across all regions, points to a mix of cautious optimism in today’s real estate market.  However, with 74% of mortgage holders up for renewal in the next 3 years, for those Canadians who are already homeowners, 1 in 5 are still anxious about renewing. 

Canadians expect housing prices to continue to rise, with 58% surveyed saying they expect prices to go up or go up dramatically in their community. However, the expectation on where mortgage rates are heading has reversed, with 66% saying they expect rates to fall or remain the same. 

Growing Share of Canadians Say They’ll Never Own

Non-owners who believe they will never own a home dropped from 51% in 2023 to 35% in 2024. While this decrease may suggest improving sentiment around homeownership, the outlook remains sobering. A drop this size reflects a shift in attitude, but not necessarily in actual buying power.

A full 35% of non-owners still believe homeownership is out of reach, and that figure is likely even higher in high-cost urban markets like Toronto and Vancouver, where incomes have failed to keep pace with the increase in home prices in these regions.

Mortgage Renewal Anxiety

The share of Canadians with high anxiety (ranking 9 or 10 out of 10) around renewing at higher rates has eased slightly to 21%. That number increases to 59% for those who purchased within the last 2 years and have high anxiety (6-10 out of 10) around renewing at higher interest rates. 

For homeowners with mortgages set to renew in the next few years, higher rates could mean hundreds or even thousands more per month in payments. Many homeowners will renew at higher mortgage rates this year, which could force many homeowners to revisit their budget priorities. 

Borrowers who bought during the low-rate years of the pandemic are especially exposed. They may face difficult decisions around renewing, refinancing or selling if they can’t absorb the increased costs or haven’t built enough home equity since their purchase. 

Most Borrowers Stay Loyal at Renewal

Of those Canadians who have renewed, 80% renewed their mortgage with the same lender as their previous mortgage term. Of those surveyed who stayed with their lender or switched, 58% stated their interest rate as the top reason for their decision. This is followed by service (30%), avoiding the stress test (24%) and access to other financial products (18%). 

Compared to previous years, the number of Canadians who say they are at least somewhat likely or very likely to use a mortgage broker has increased. Nearly 68% said they would consider using a mortgage broker for their next mortgage. Of those who have already used a broker, 81% said they would use one again. 

Costs of Breaking a Mortgage Early Increase

Many Canadians (78%) who chose to break their mortgage early were able to avoid prepayment penalties. However, the average cost of breaking a mortgage early has nearly doubled in the last year. The average penalty for breaking a mortgage before maturity has increased to $6,732.  

With mortgage lenders applying different types of penalty calculations, these costs can vary dramatically, especially on interest-rate differential (IRD) calculations if rates have dropped since the mortgage was signed. Those with fixed-rate mortgages with IRD penalties often face the steepest penalties, so it’s essential to understand how your lender calculates their penalties if you are planning to break your mortgage early. 

Savings Remains Top Down Payment Source

For first-time buyers in the last 5 years, 56% used personal savings or a co-buyer’s savings. Other down payment sources include: loans from a financial institution (18%), gift from a parent or other family member (12%), withdrawal from an RRSP including the Home Buyers Plan (9%), loans from parents or other family members or friends (3%), loan from employer (2%), other sources (1%). 

Of those who received help with their down payment, 58% would not have been able to afford the down payment without assistance. 

What This Means for Buyers, Renewers and Refinancers

Canadians, whether buying for the first time, renewing a mortgage, or refinancing to access equity, are being impacted in very different ways. The common thread is that everyone is having to plan more carefully. 

Homebuyers continue to face affordability pressures but are increasingly relying on personal savings, family gifts, and alternative ownership strategies like co-buying. Many are expanding their search to include smaller communities or more affordable property types to get a foot on the property ladder.

Renewers make up the largest cohort of mortgage holders facing immediate decisions that will impact their finances. Mortgage rates remain the number one factor prompting borrowers to stay with their current lender or switch. With over half of mortgage holders set to renew at higher rates, shopping around for the best rates can make a significant difference in monthly payments.

Refinancers are weighing the costs and benefits more carefully than ever. With the average penalties to break a mortgage climbing and shrinking home equity, the decision to refinance is less about timing the market and more about personal financial flexibility. Debt consolidation and cash-flow planning remain key motivators for those moving ahead despite the added costs.

Frequently Asked Questions (FAQ) About the State of the Canadian Housing Market

Final Thoughts

Canada’s housing market may be stabilizing, but that doesn’t mean it’s getting easier to afford. From renewal anxiety to rising penalties and stretched affordability, Canadians need to make more strategic decisions at every step of the mortgage process. Whether you’re a first-time buyer, renewing your mortgage, or considering refinancing, having the right support can make all the difference.

A nesto mortgage expert can help you explore the best mortgage options before rates change, reduce renewal payment shock with tailored strategies, and guide you as you make a decision that best matches your long-term financial goals and unique needs.

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