US FED HIKE PUSHES CANADIAN FIXED RATES HIGHER
The US Federal Reserve raised its key rate by 25 basis points this week, its first hike since 2023. The move matters here because Canadian fixed mortgage rates follow the bond market, not the Bank of Canada’s own policy rate. Higher US rates push US Treasury yields up, and those yields pull Canadian government bond yields along with them, which pushes fixed mortgage rates higher on this side of the border too.
The Bank of Canada held its own rate at 2.25% on September 2 for a seventh straight meeting, keeping prime rate at 4.45%. But minutes from that meeting show officials are watching oil prices closely. Middle East disruptions have pushed crude above $100 a barrel, and officials said sustained high energy costs could force a policy response before they spread into broader inflation. More people now expect the Bank could raise rates before the year is out if that happens.
What this means for your mortgage: if you’re comparing fixed rate options or coming up on a renewal, the bond market has been moving even while the Bank’s own rate sits still. It’s worth locking in a rate hold sooner rather than later to protect your pricing while these shifts play out.
TORONTO CONDO BUYERS TURN AWAY FROM THE SMALLEST UNITS
New data from Wahi and Real Property Solutions shows GTA condo units under 500 square feet lost 12.2% of their value between 2020 and 2025, more than double the 6.2% decline in larger 500-700 square foot units. Toronto condo sales and prices dipped again in August.
With investor buyers largely absent from the market, first-time end-user buyers are moving away from small microunits toward condo townhouses in the $650,000 to $750,000 range, drawn by more space, bedrooms, and predictable monthly costs, with condo fees in established complexes running around $600 a month.
What this means for your mortgage: if you’re a first-time buyer who assumed a condo townhouse was out of reach, this is a segment worth a second look. The qualifying math and financing path are the same as any purchase, but the value proposition has shifted meaningfully compared to a microunit at a similar price point.
WHAT MORTGAGE RENEWALS LOOK LIKE HEADING INTO YEAR END
The Bank of Canada estimates roughly 60% of outstanding mortgages are renewing across 2025 and 2026 combined, and with the year wrapping up, most of that wave has already worked through the system. For anyone still coming up for renewal in the next few months, the average payment increase on a 2026 renewal has been running around 6%. But for five-year fixed terms locked in near record lows back in 2020 or 2021, that jump can run 15% to 20% instead.
What this means for your mortgage: with fixed rates having climbed again this month, it’s worth knowing which group you fall into well before your renewal date arrives, so there are no surprises when the new payment lands.
WHERE THINGS STAND
Variable rate holders: the Bank of Canada held at 2.25% for a seventh straight meeting, keeping prime rate at 4.45%, but minutes show growing concern over oil-driven inflation, so a hike before year end isn’t off the table. Fixed rate holders and anyone renewing soon: rates have moved higher this month, so it’s worth checking your numbers now. And if your situation has changed and you’re not sure your current mortgage still fits, reach out and we’ll take a look together.
Call or text 249-480-1249. HumberBayMortgages.ca.
Simon Browning | Mortgage Agent Level 2 | BRX Mortgage 13463
Sources: Bank of Canada; US Federal Reserve; Wahi/Real Property Solutions; Canadian Mortgage Professional; Bloomberg/CMT News