How Canadian Homebuyers Are Navigating the 2026 Housing Market
Despite higher home prices and tougher mortgage qualification rules, determined Canadians are still looking for ways to break into the housing market. Whether through parental support or moving to more affordable regions, buyers are getting creative to make their homeownership dreams a reality.
The Canada Mortgage and Housing Corporation (CMHC) recently released its 2026 Mortgage Consumer Survey, which polled 4,112 first-time buyers, renewers, refinancers, and repeat buyers on their views of homeownership and mortgages in Canada. This survey sheds light on the state of the housing market and how buyers are strategizing to become homeowners.
Key Takeaways
- Mortgage consumer confidence improved in 2026, though respondents remain concerned about making their mortgage payments.
- It now takes homebuyers an average of 4.4 years to save for a down payment.
- Renewers continue to dominate the mortgage market, with many experiencing an average $375 increase in monthly mortgage payments.
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Market Trends and Buyer Behaviours
According to the latest 2026 Mortgage Consumer Survey from CMHC, market trends indicate a clear shift in how Canadians approach homebuying. This year, many Canadians remain confident that their home purchase is a good long-term investment compared to previous years. However, only 68% of those surveyed this year believe the value of their home will increase in the next 12 months, down from 74% in 2025.
Market Uncertainty Remains
Market uncertainty remains elevated, with 47% of those surveyed citing concerns or uncertainty during the homebuying process, down from 62% in 2025. This year’s top concerns include unforeseen housing costs (46%), paying too much for a home (41%), living with post-homebuying costs (36%), home maintenance (32%), and searching and finding the right home (31%).
Uncertainty persisted throughout the mortgage process, with one in four expressing concerns or uncertainty. This year’s top concerns include interest rate fluctuations (35%), affordability of monthly payments (29%), understanding mortgage terms and conditions (25%), managing timing and deadlines (24%), and trust in mortgage professionals (23%).
Who’s in the Mortgage Market? Renewers Continue to Dominate
Understanding who makes up Canada’s mortgage market helps paint a clearer picture of the pressures borrowers are facing today. According to the latest CMHC survey, the vast majority of mortgage activity isn’t coming from new purchases. Most of the mortgage market is those renewing or refinancing existing mortgages, with many navigating higher rates.
The majority (66%) of respondents were renewers, rising from 65% in 2025 and 62% in 2024, representing a significant share of Canada’s mortgage market. Refinancers comprised 19% of the mortgage landscape, with tapping into equity for home improvements or renovations remaining the top reason borrowers refinance. First-time buyers fell to 11% of the mortgage market in 2026, down from 12% in 2025. Repeat buyers make up 5% of the mortgage market, the same share as in 2025.
| Renewers | Refinancers | First-Time Buyers | Repeat Buyers | |
|---|---|---|---|---|
| Concerned About Defaulting | 37% | 47% | 40% | 25% |
| Missed a Payment (Past Year) | 8% | 12% | 6% | 1% |
| Difficulty Keeping up With Debt | 38% | 53% | 41% | 17% |
| Using Credit to Pay Credit | 18% | 25% | 16% | 8% |
The data reveals a clear pattern: refinancers are under the most financial pressure of any borrower segment, with nearly half (47%) concerned about defaulting, higher even than first-time buyers. This suggests that tapping into home equity, while useful for renovations or debt consolidation, may add additional strain rather than relieve it, especially when interest rates are high. Meanwhile, repeat buyers show the least financial stress across all metrics, likely because accumulated equity, whether accessed through a sale, HELOC, or refinance, can provide a larger down payment to reduce the mortgage amount or create a financial cushion to manage other expenses.
First-Time Homebuyer Trends
First-time homebuyers in Canada are navigating a challenging affordability landscape by adapting their living and purchasing arrangements in new ways. 27% of first-time buyers purchased their first home while living with friends or family, likely to save more aggressively for a down payment.
Among those who rented before buying, the average rental period increased to 7.6 years in 2026, up from 6.3 years, reflecting the longer financial preparation required before taking the leap into homeownership. However, from the first-time buyers surveyed, the average time they saved for a down payment was 4.7 years, up from 3.7 years in 2025. The financial stretch is also evident in how much buyers are willing to commit: 55% of first-time purchasers said they spent the maximum amount they could afford on their home.
Impact of Interest Rates on Homebuying
Interest rates significantly affect home affordability and a homebuyer’s budget. Higher interest rates reduce buying power, meaning you qualify for less when interest rates are higher. Renewers were more likely to report increased financial pressure due to rising rates. On average, renewers who experienced increased financial pressure due to changing interest rates saw their mortgage payments rise by $375 per month.
Shopping around can save you considerable interest-carrying costs, especially during your first term, when you’re paying more towards interest than principal with your mortgage payments. Even a small difference in the interest rate can equal significant savings over your mortgage term. Securing a lower interest rate can reduce mortgage payments, lower debt service ratios, and help you qualify for more.
Impact of Interest Rates on Mortgage Payments and Interest
The table below illustrates the cost savings of choosing a slightly lower rate on your monthly mortgage payments and the amount of interest you pay. Selecting the lower rate lowers your monthly payments by approximately $89 and saves you roughly $7,767 in interest over a 5-year term on a $650,000 mortgage with a 25-year amortization.
| Interest Rate | 4.14% | 4.39% |
| Monthly Mortgage Payments | $3,468.64 | $3,557.93 |
| Total Term Interest Paid | $125,340.83 | $133,108.25 |
| Total Term Principal Paid | $82,777.67 | $80,367.70 |
| Total Savings (Interest) | $7,767.42 |
Impact of Interest Rates on Affordability
The table below illustrates the impact on affordability based on the interest rate you are offered. Using the lower interest rate, we assume you qualify for a maximum mortgage of $650,000, with a 20% down payment, for a total purchase price of $812,500, with a 25-year amortization.
With a higher interest rate, you qualify for less, impacting your purchasing power by $16,313. If you want to purchase the same home, you must increase your down payment by the shortfall to cover the difference. You could also extend the amortization to 30 years to offset the impact of a higher rate, but this would mean paying more interest over the life of the mortgage.
A higher interest rate reduces the size of the mortgage you can carry, directly lowering the maximum price of the home you can afford, even if your income and down payment stay the same. This rate difference can mean choosing between buying in a preferred neighbourhood or compromising on location, size, or features.
| Interest Rate | 4.14% | 4.39% |
| Maximum Purchase Price | $812,500 | $796,187 |
| Down payment | $162,500 (20%) | $162,500 (20.3%) |
| Maximum Mortgage | $650,000 | $633,687 |
| Difference in Purchasing Power | $16,313 |
How Homebuyers are Saving to Afford Homes
Housing affordability continues to be an issue for many Canadians. While the minimum down payment is 5%, many prospective homeowners must put down much more than that to afford the average-priced home. This is especially true in hot markets like Toronto and Vancouver, where home prices regularly exceed $1 million, requiring a higher down payment to increase purchasing power.
Homebuyers said they had to save an average of 4.4 years for their down payment, compared to 3.4 years in 2025.
To afford a larger down payment, many Canadians continue to turn to family for help. This year, 23% of homebuyers, compared to 35% last year, received gifts to use as part of their down payment source. The median amount gifted was $30,000.
However, gifts were not the largest contributor to the down payment. First-time buyers cited using their savings before a gift or inheritance. Meanwhile, repeat buyers used equity from a previous home, a HELOC, and savings before a gift or inheritance.
The Role of Technology
Technology plays a big part in our everyday lives, from work to leisure, so it’s no surprise that it is also shaping how prospective buyers search for a home and get a mortgage. Prospective buyers can now browse numerous online listings, view virtual home tours, and even apply for a mortgage through digital platforms like nesto.
One in three mortgage consumers completed their entire mortgage transaction remotely, with repeat buyers and renewers the most likely to handle everything remotely.
Of those surveyed by CMHC, 77% of mortgage consumers researched mortgage information online. The top website sources for online mortgage-related research and information were:
- interest rate comparison sites (33%),
- mortgage broker (32%),
- lender (31%),
- CMHC (20%),
- real estate listing (20%),
- AI (16%)
- Government (13%).
Most mortgage consumers doing research online were comparing rates (88%) and using mortgage calculators (72%). Meanwhile, 49% completed a financial self-assessment, and 46% submitted an online mortgage pre-qualification or pre-approval application.
Frequently Asked Questions (FAQ) About Navigating the Canadian Housing Market
What are Canadians’ most common strategies to afford a home today?
Many homebuyers are adjusting their budgets by reducing discretionary spending, saving longer for a down payment, and shopping around for the best mortgage rate. Others are relying on financial support from family, leveraging equity from a previous home, or extending their amortization period to lower monthly payments.
How long does it take to save for a down payment in Canada?
According to CMHC’s 2026 Mortgage Consumer Survey, it takes homebuyers an average of 4.4 years to save for a down payment, up from 3.4 years in 2025. First-time buyers reported an even longer timeline, averaging 4.7 years of saving before purchasing their first home.
Are first-time homebuyer incentives still useful in today’s market?
Programs like the First Home Savings Account (FHSA), the Home Buyers’ Plan (HBP), and various provincial incentives continue to help reduce costs through a mix of tax advantages and rebates. These options remain a key part of the strategy for first-time buyers working toward saving for a down payment and purchasing their first home.
Final Thoughts
The latest CMHC survey shows that while consumer confidence in the mortgage market is improving, affordability remains a challenge for many Canadians. Longer savings timelines, rising renewal costs, and economic uncertainty continue to shape how buyers and existing homeowners approach their mortgage decisions. At the same time, borrowers are being proactive, adjusting budgets, shopping around for better rates, and leveraging digital tools.
nesto’s digital platform streamlines the mortgage application process from start to finish and provides a comprehensive overview of your financing options from the comfort of your home. Contact a nesto mortgage expert today to find the most suitable mortgage strategy for you.
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