What July’s Market Update Means for Your Mortgage Plans

Emily Miszk
Aug 8
3 min read

The latest data shows that the mortgage and housing landscape is shifting — and not always in ways that make borrowing cheaper or easier. If you’re a current homeowner, a soon-to-be buyer, or planning a renewal in the next couple of years, here’s what you need to know.

1. No Rate Cuts This Summer — and Fixed Rates May Nudge Higher

The Bank of Canada was expected to start lowering rates, but stubborn inflation and a surprisingly strong jobs market have changed the outlook. Rate cuts are now unlikely before fall, and even then, they’re not guaranteed.

What it means for you:

Fixed mortgage rates: Currently in the low-to-mid 4% range for most borrowers, and could tick up in the short term as bond yields rise.
Variable mortgages: Now may not be the time to gamble — the risk of rates staying higher for longer is real.

2. Renewals Will Hit Harder for Some Borrowers

The Bank of Canada’s latest modelling shows that:

60% of mortgages renewing in 2025–2026 will see a payment increase.
Average increase: 10% in 2025 and 6% in 2026.
The hardest hit:
- 5-year fixed borrowers from the 2020–2021 low-rate period could see payments jump 15–40%.
- Some static-payment variable mortgage holders could face big lump-sum catch-up payments.

Takeaway: Even if the average renewal bump doesn’t sound scary, many households will face much higher jumps. Planning ahead is critical to avoid payment shock.

3. Housing Supply is Strong — But the Market is Uneven

Rental construction is at record highs, and vacancies may start to rise, especially in Ontario, as population growth slows. On the flip side, new single-family home construction is at 40-year lows in Ontario and BC, which could lead to tighter supply in that segment by 2026.

For buyers: This could mean more negotiating power in the short term for certain property types, but less in the years ahead.

4. Home Prices Are Soft — Especially for Condos

National home prices are down almost 18% from peak, with condos facing the steepest declines. In some areas, units are selling below 2017 prices. This is making it harder for condo owners to “move up” to a larger home, since they have less equity than expected.

Impact on homeowners: If you’re planning to sell and buy again, especially from a condo to a detached home, be prepared for smaller-than-expected proceeds from your sale.

5. Consumer Confidence is Still Fragile

While confidence has improved slightly from the lows earlier this year, many Canadians are still hesitant to make major purchases or take on new debt due to interest rates and job market concerns.

Mortgage Planning Tips in Today’s Market

If you’re up for renewal soon: Get a rate hold early and explore all term options — the “default” 5-year fixed may not be the best fit.
If you’re buying: Factor in the possibility of rates staying higher longer and budget with a cushion.
If you’re considering a variable rate: Be realistic about your risk tolerance — stability might outweigh potential savings right now.
If you’re worried about payments: Talk to your mortgage professional about strategies like extending amortization, blending and extending, or making lump-sum prepayments while rates are still manageable for you.