Why a Cooling Market Could Be the Best Time to Buy a Home in Canada

When I met with a couple recently, they told me they were sitting on the sidelines waiting for “the right time” to buy. They had assumed they missed their chance when prices surged a few years ago. The truth? The window isn’t closed. In fact, with today’s shifting market, new opportunities are opening up for buyers.

Across Canada, the housing market is entering a cooler, more balanced phase. That’s not bad news — it can actually be a good thing for anyone looking to purchase a home.

The Canadian housing market is adjusting

Over the last few years, Canadians have seen some of the fastest price growth in history. Now, that growth is slowing down. National forecasts are predicting a slight decline in average home prices this year — around 2% in many regions.

What does that mean for you? In many cities, buyers are regaining negotiating power. Homes are staying on the market longer, price reductions are becoming more common, and sellers are more open to offering incentives like covering closing costs or offering flexible possession dates.

This shift isn’t a “crash.” It’s a reset — and it creates room for thoughtful buyers to step in.

Opportunities for buyers in a cooling market

1. More negotiating power
   In competitive years, buyers often had to bid above asking. Today, you’re more likely to secure a home at or even below list price.

2. Wider selection
   With homes staying on the market longer, you don’t have to rush decisions. You can compare more properties and find the one that truly fits your needs.

3. Flexibility from sellers
   Whether it’s getting repairs done before closing, asking for certain upgrades, or choosing your move-in date, sellers are more open to working with buyers.

4. Long-term value potential
   Cooler conditions now can set the stage for steady, sustainable growth in the future — a healthier investment environment.
   

   

   A story of timing and patience

   Take for example a young buyer who sold their condo in a busy urban market earlier this year. Instead of waiting indefinitely for the “perfect time,” they used today’s balanced market to make a move. With fewer bidding wars, they negotiated a purchase at 5% below asking. The home needed minor updates, but the savings left them with enough room in their budget to handle those upgrades without stress.

   That’s what a balanced market makes possible — opportunities that don’t exist when competition is at its peak.

   Tips for buyers right now

   Here are actionable strategies in this cooling environment:

   • Get pre-approved early: Sellers value certainty. Being pre-approved can make your offer stronger, even in a slower market.

   • Look beyond the headline numbers: A national average doesn’t always reflect what’s happening in your city. Work with a broker who knows your local market.

   • Target homes with longer listing times: Properties that have been on the market for weeks or months are often more negotiable.

   • Think about your timeline: If you plan to hold a property for five to ten years, short-term price fluctuations matter less.

   • Negotiate more than just price: Ask about upgrades, appliances, closing credits, or flexible terms.
     

     

     The bottom line

     Canada’s market is shifting. Instead of seeing this as a setback, think of it as a chance to buy in a calmer, more balanced environment. If you’ve been waiting, this could be your opportunity to secure the right home without the pressure of a bidding war.

     If you’d like help reviewing your options, running the numbers, and finding opportunities in your local market, I’d be happy to walk you through it.

5 Questions to Ask Your Mortgage Broker in Canada

Shopping for your first mortgage can feel like a big step, but it doesn’t have to be confusing. As someone who’s helped many young Canadians navigate their first home purchase, I’ve found that asking a few key questions up front keeps everything clear and stress-free.

1. Which Mortgage Type Fits Your Plans?

Every mortgage falls into one of three categories: fixed rate, variable rate, or a combination of the two. A fixed rate keeps your interest and payments the same for the entire term, which makes budgeting simple. A variable rate often starts lower but can rise or fall as the Bank of Canada adjusts its key rate. A combination mortgage lets you split part of your loan at a fixed rate and part at a variable rate. Think about how long you plan to stay in your home and how comfortable you are with possible rate changes.

2. What’s the Total Cost? Posted Rate versus APR

Banks and brokers often advertise their discounted rate front and center, but that’s not the whole story. The posted rate is the lender’s list or standard rate before any discount is applied. Your discounted rate is what you actually pay each month. Meanwhile the annual percentage rate, or APR, reflects the true cost over the term by including most lender fees such as application or administration charges. Comparing APRs across lenders gives you a clear picture of which offer really costs you the least in the long run.

3. Which Fees and Penalties Should You Expect?

Beyond interest there are a variety of fees that can catch you off guard if you’re not prepared. You may face application fees, appraisal and legal fees, property transfer taxes, and discharge fees when you pay off or switch mortgages. If you decide to break your mortgage early or pay more than your allowed prepayment limit the lender will charge a penalty. Ask your broker for a written fee schedule so youknow exactly what you’ll owe, both now and if you need to make changes later.

4. How Much Can You Actually Afford? Stress Test and Ratios

Lenders use a “stress test” to ensure you could handle higher interest rates in the future. They also look at two key ratios: the gross debt service ratio, which compares your housing costs to your income, and the total debt service ratio, which compares all your debts to your income. By running your numbers through these measures your broker can tell you the maximum mortgage you qualify for and suggest a payment that keeps you comfortable. This way you won’t feel stretched too thin if interest rates rise or unexpected expenses pop up.

5. How Flexible Are Your Prepayment Options?

If you come into extra cash—perhaps from a bonus, gift, or savings—you’ll want to use it to pay down your mortgage faster. Lenders usually allow an annual lump-sum payment of around 10 to 20 percent of your original mortgage amount, and they may let you increase your regular payments by a set percentage. Exceeding these limits can trigger a penalty based on the lender’s posted rate. Ask for all prepayment details so you can plan a five- or ten-year strategy to reduce your interest costs and own your home sooner.

Next Steps

By covering these five areas with your mortgage broker or lender you’ll gain confidence, avoid hidden fees, and choose the best mortgage for your needs. Ready to get personalized advice and step into homeownership?

What’s Changed Since the Pandemic?

Remember those record-low mortgage rates in 2020 and 2021? Some of us locked in 5-year fixed terms under 2%. But if you’ve been waiting for those deals to come back, it might be time to adjust expectations.

Ultra-low interest rates were a response to a global emergency. Central banks, including the Bank of Canada, slashed rates to near zero to keep the economy afloat during COVID-19 lockdowns. Now that the economy has stabilized and inflation is no longer transitory, those emergency measures have ended. 

Why Rates Aren’t Expected to Drop That Low Again

According to the latest insights from Canadian Mortgage Trends and other economists, there are a few major reasons we’re unlikely to see sub-2% mortgage rates return:

• Persistent Inflation Pressures: Even with inflation cooling off, it’s still above the Bank of Canada’s 2% target.
  Global Economic Shifts: Higher oil prices, supply chain realignments, and geopolitical tensions all contribute to a more expensive world.
  Strong Employment Numbers: Canada’s job market remains resilient, which gives the Bank of Canada little incentive to aggressively cut rates.
  Government Spending: Fiscal policies like housing initiatives and infrastructure spending add upward pressure to inflation, keeping rates higher longer.

So, What Does This Mean for Canadian Homeowners?

If you’re renewing your mortgage, shopping for your first home, or exploring investment properties, here’s how you can respond to this new normal:

• Adjust Budget Expectations: Plan for mortgage rates in the 4–6% range for the foreseeable future.
• Work With a Broker: Mortgage brokers have access to a wider range of lenders and flexible solutions—especially valuable now.
• Look at Shorter Terms or Variable Options: If you believe rates will come down slowly, you may not want to lock intoa long-term fixed rate.
• Get Pre-Approved Now: Locking in today’s rate can protect you from potential hikes, especially as fall approaches.   

What If You Bought at Low Rates in 2020?

If you’re facing renewal in 2025 or 2026, your payment could increase significantly. That’s where a strategy comes in. Consider these steps:

• Reassess your budget today, don’t wait until renewal.
• Consider refinancing to a longer amortization for lower payments.
• Talk to a broker about switching lenders if your current offer isn’t competitive.

Bottom Line

Ultra-low rates served a purpose during the pandemic, but they weren’t built to last. Today’s rate environment is more in line with historical norms, and likely here to stay. The good news? There are still smart ways to borrow, invest, and grow your real estate portfolio.

Need help navigating your mortgage in a higher-rate market?
Let’s talk strategy. Whether you’re renewing, refinancing, or buying for the first time, I’m here to help you find the right solution.

📞 Call me at 416-882-4172
📧 Email: mortgages@dannycardoso.ca

How Bond Yields and Bank of Canada Policy Rates Drive Mortgage Rates: What to Expect Through 2026

As your mortgage broker, I believe one of the most important conversations we can have is around why mortgage rates move, what is driving them now, and what might happen over the next year. Below I explain how bond yields and Bank of Canada (BoC) decisions influence what you pay. Then I walk through where things look to be headed through the remainder of 2026, with risks you should watch.

The Mechanics: Bond Yields, BoC Policy Rate, and Mortgage Rates

Government Bond Yields

• The yield on government bonds (especially the 5-year Government of Canada bond) is a key benchmark for fixed-rate mortgages. Lenders see these yields as the starting cost of funds for a fixed-period mortgage, then add spreads (for credit risk, liquidity, operations, profit) to that base.
• When bond yields rise, particularly on mid-term durations (3-5 years), you can expect fixed mortgage rates to follow. If yields drop, fixed rates tend to soften, all else equal.

Bank of Canada Policy / Overnight Rate

• The BoC’s overnight policy rate (often called the target for the overnight rate) is what banks use in lending to each other. It influences prime, which in turn influences variable-rate mortgages, home equity lines of credit (HELOCs), adjustable mortgages, etc.
• BoC uses its rate policy as its main tool to control inflation and influence economic activity: higher rates slow borrowing and spending; lower rates encourage activity when inflation is under control. Because variable mortgage rates are tied more directly to prime, they respond more immediately to BoC moves than fixed rates do.

The Spread: Why Mortgage Rates > Bond Yields

• Fixed mortgage rates are always higher than comparable bond yields because of added risk and cost: default risk, administrative costs, pre-payment risk (if people pay off or refinance early), liquidity risk, profitability. The “spread” between bond yields and fixed mortgage rates is an important metric—and sometimes lenders widen this spread when markets are volatile or risk is perceived to be high. 

Other Influences

• Inflation expectations, global economic conditions (interest rates elsewhere, supply‐and‐demand for bond issuance), fiscal policy, and debt‐issuance by government all feed into both bond yields and BoC decisions.
• Mortgage lenders also compete; so market competition will push rates lower if bond yields stay steady or fall. Conversely, if yields are rising and lenders anticipate that risk, they may pre-emptively raise fixed rates.
  

Where Things Stand Now (As of Late 2025)

To give you the latest snapshot:

• The Bank of Canada’s policy (overnight) rate is 2.75%, following several cuts since mid-2024. The Bank has paused after those cuts.
• The 5-year Government of Canada bond yield is about 2.80-2.90% (recent days’ data placing it near ~2.87%) depending on exact benchmark and pricing.

What this means practically:

• Variable/adjustable mortgages and HELOCs are benefitting (or will benefit) more directly, sooner, from BoC rate cuts (if they occur), since their rates adjust with prime or other short-term benchmarks.
• Fixed mortgage rates reflect what bond yields have already done (or are expected to do), but with some lag—and with spread adjustments depending on lenders’ perceptions of risk and competition.
  

Forecast for 2026: What to Expect for Mortgage Rates

While nobody can predict with certainty, here is an informed view based on current trends, analyst surveys, and risk factors.

Risks and Key Unknowns to Watch

• Inflation surprises: If inflation stays above target (or rebounds due to global energy, supply chain, or other pressures), bond yields could spike, prompting the BoC to pause cuts or even raise.
• Global interest rate environment: U.S. Federal Reserve, European Central Bank and others will influence bond markets. If rates abroad are high, investors may demand higher yields in Canada to keep up.
• Government debt issuance & fiscal policy: Large deficits and heavy borrowing increase supply of bonds, influencing yields upward.
• Housing market strength and renewals: A lot of mortgages are up for renewal in the next couple of years for people who took them when rates were very low. When those renewals come, borrowers will feel effects of higher rates. That in turn can affect consumer spending and broader economic growth—and may shape BoC policy.

What This Means for You (Mortgage Planning Advice)

Given all of the above, here are some strategies and considerations:

• If you have a fixed-rate mortgage or plan to lock in a fixed rate, now might be a time to consider locking in if you believe bond yields are near a peak, or if you want certainty ahead of possible renewals.
• If you have a variable rate mortgage or HELOC, and you are comfortable with some level of risk, you may benefit if BoC cuts but keep an eye on inflation signs (which could delay cuts).
• For renewals, it’s important to start discussions early. The spread between what your current rate is and what you might be offered can be significant, especially in volatile times.
• Shop around: Different lenders (banks vs. monoline lenders) have different cost structures and spreads. Sometimes non-bank lenders can offer slightly more aggressive fixed-rate spreads, though they may come with trade-offs (e.g. less flexibility, fewer product features).
• Monitor bond yields and BoC statements: Data like inflation, employment, and global risks (trade, commodity prices) will give signals before rate announcements occur.

Bottom Line Prediction through End of 2026

Putting everything together, my best estimate for mortgage rates (for a typical, well-qualified borrower) by year-end 2026 is:

• 5-year fixed mortgage rates in the ~3.8%-4.2% range under favorable conditions; more likely around 4.0%-4.5% if bond yields remain somewhat elevated or spreads widen.
• Variable or adjustable mortgages are likely to be lower than fixed in many scenarios, especially after BoC begins or continues rate cuts; but variable rates will likely remain above the overnight BoC rate plus prime spreads.

If you have any questions about what this means for your situation (purchase, renewal, refinance, etc.), I’m happy to walk through different scenarios. Understanding the levers helps make better decisions.

Best regards,

Danny Cardoso

Is Your Mortgage Pre-Approval Actually Useless? Here’s Why It Might Be

A Rate Hold Isn’t a Guarantee—And That Could Cost You the Home

Getting pre-approved for a mortgage should feel like progress. It’s exciting, empowering, and often the first concrete step toward buying a home. But here’s the hard truth: if your mortgage pre-approval wasn’t put together properly—or if your broker or banker skipped key steps—it could be virtually worthless when you need it most.

Let’s break down what a pre-approval really means, what a rate hold does (and doesn’t) do, and why experience matters more than ever in a fast-paced, competitive real estate market.

What Is a Mortgage Pre-Approval Really?

A mortgage pre-approval generally includes two things:

• A conditional approval based on the numbers provided by your broker or banker. 
• A rate hold that locks in an interest rate (typically for 90–120 days), giving you time to shop with peace of mind. 

But here’s the issue: most lenders don’t actually do a full review of your application until it becomes “live”—that is, until you’ve written an offer that’s been accepted. Before that, they’re mostly relying on the information submitted by your broker or banker, not what they’ve verified themselves.

The Danger of a Sloppy Pre-Approval

Because lenders are only reviewing estimated numbers initially, a pre-approval is always conditional. If anything doesn’t add up when they finally double-check it, you could lose your approval—and possibly your home.

Here are some common issues that can derail things during a live file review:

• Your income was calculated incorrectly (especially for variable or self-employed income)
• There’s undisclosed debt (like student loans, car leases, or co-signed obligations)
• Your down payment source wasn’t verified properly
• Something as simple as a missed document throws off the whole deal 

This is why it’s so critical to work with an experienced broker who knows how to present your file correctly the first time.

⚠️ Pro tip: If your broker or banker didn’t ask for full income documents, verify your credit, and analyze your debt load, you don’t have a real pre-approval—you have a placeholder.

Rate Holds: What They Do and What They Don’t

Rate holds are helpful, no question. They give you a buffer against rising rates while you search for the right property. But even if you’re holding a great rate, that doesn’t guarantee your mortgage will go through when it counts.

Lenders only commit to financing once they’ve verified everything. And even then, there’s another major piece of the puzzle…

Your House Has to Qualify, Too

This surprises a lot of buyers: just because you are approved, doesn’t mean the home is. Lenders always assess the property you’re buying, because they’re investing in it with you. If something about the home makes them uncomfortable—like:

• A poor inspection 
• A property in a high-risk location 
• Structural or zoning issues 
• A condo building with known financial concerns 

…they can walk away. This doesn’t mean your homeownership journey is over—but it does mean you need someone in your corner who can help pivot to another lender or solution quickly.

Why Experience Matters More Than Ever

A pre-approval is only as good as the person behind it. An experienced mortgage broker will:

• Fully underwrite your file upfront 
• Spot issues before the lender does 
• Explain what could cause problems down the line 
• Prepare you for the reality of lender and property review 

This extra care can be the difference between closing confidently and scrambling under pressure.

Final Thoughts: Ask the Right Questions Before You Rely on That Pre-Approval

Before you start house hunting, ask your mortgage expert:

• Was my income fully reviewed and verified? 
• Did you check my credit? 
• Have you reviewed all debts and liabilities? 
• Is my file ready to go live? 

If the answers are vague or rushed, it might be time for a second opinion.

Have questions about how strong your pre-approval really is? Let’s talk.
Call me at (416)-882-4172 or email mortgages@dannycardoso.ca to make sure your mortgage strategy is solid from day one.

Looking back, 2020 was an ideal time to buy a home. Prices were lower, and mortgage rates were around 3%. Those who entered the market then have seen significant gains, with home prices rising more than 30% since early 2020.

But if you didn’t buy, does that mean you’ve missed your chance? Not at all. Real estate always increases in value over the long term, but the key is recognizing opportunities when they appear.

And the next opportunity may be just around the corner.

The Market Has Moved—And a Shift Is Coming

Here’s how Canadian home prices have changed since 2020:
Prices increased dramatically from 2020 to 2022, followed by a dip in 2023. However, the market has already started recovering, and the Canadian Real Estate Association (CREA) forecasts home prices will rise another 3.3% by 2026.

Why 2025 Could Be a Unique Buying Opportunity

Many of the buyers who secured homes at historic low interest rates in 2020 and 2021 will soon be facing mortgage renewals at rates that are double or even triple what they originally paid.

This could result in:

• More homes hitting the market – Some homeowners will no longer be able to carry their mortgages at the new rates and will need to sell.
• Investment properties being offloaded – Many investors purchased rental properties when borrowing was cheap. If these properties no longer generate positive cash flow, some investors may look to sell.
• Greater selection for buyers – More listings in the market could create opportunities for those who have been waiting to enter.

Barbara Corcoran (@barbaracorcoran) has seen these cycles play out before. Her advice remains clear:

“Don’t wait to buy real estate. Buy real estate and wait.”

Interest Rates Fluctuate—Real Estate Always Moves Up

Interest rates have been a key factor in buyer hesitation. But history shows that:

• Rates are already lower than their peak. After reaching nearly 6% in late 2023, they have declined to around 4.5% today depending on the lender and mortgage type.
• When rates drop, prices rise. As borrowing becomes more affordable, more buyers enter the market, increasing demand and pushing prices higher.
• Long-term trends show real estate always appreciates. Even after temporary dips, home values recover and surpass previous highs.

“The perfect time to buy a house? When you can afford the down payment—not when you’re waiting for the ‘perfect’ market.” — Barbara Corcoran

Where Will the Best Buying Opportunities Be?

For those who missed the low rates of 2020-2021, 2025 could bring new opportunities, including:

• Distressed Sales – Some homeowners renewing at much higher rates may list their homes out of necessity, creating potential buying opportunities.
• Investment Properties for Sale – Properties that no longer generate strong cash flow may be offloaded by investors who purchased during the low-rate environment.
• Suburban and Secondary Markets – With affordability stretched in major cities, smaller markets may see increased inventory and softer pricing.

Play the Long Game—Not the Waiting Game

Real estate is a long-term investment, and those who enter the market sooner rather than later tend to benefit the most.

1. Equity Growth – The longer you own, the more your home appreciates and builds wealth.
2. Market Stability – While short-term fluctuations happen, the long-term trend remains upward.
3. Wealth Creation – Real estate remains one of the best tools for building financial security.

Many buyers in 2020 hesitated, thinking prices would fall. Instead, they increased dramatically. The next opportunity is coming—will you be ready for it?

📞 Call us at 416-882-4172
📩 Email mortgages@dannycardoso.ca  

Let’s discuss your options before the next wave of buyers enters the market.