Your Weekly Update on Rates, Trends & Opportunities
Interest Rate Moves
After briefly dipping below 4%, five-year fixed mortgage rates in Canada are climbing again, with most major banks increasing their rates by 10–15 basis points. This rise is being driven more by U.S. bond market volatility than domestic factors, as Canada’s 5-year bond yield closely follows the U.S. 10-year Treasury. While some lenders like Scotiabank are going against the trend with deep short-term cuts, experts like Bruno Valko and Ron Butler suggest borrowers weigh fixed-rate stability against future variable-rate cuts — which many expect to resume as early as June【2】.
Market Highlights
Canada’s spring housing market continues to stall, with national home sales down 0.1% in April and average prices falling 3.9% year over year. In Ontario, inventory has surged — listings in the GTA are up 66% compared to April 2023, while sales have dropped 26%. According to mortgage broker Leah Zlatkin, buyers now have more leverage than they’ve had in years, with price drops, longer listing times, and a rise in relistings creating opportunities for well-prepared buyers【1】.
Expert Insight
Despite lower mortgage rates and softening prices in some provinces, affordability remains a major challenge. According to Desjardins economist Kari Norman, it now takes the average Canadian household about 6 years to save a 20% down payment — longer in Ontario and BC. High rent inflation, stagnant wage growth, and ongoing economic uncertainty tied to tariffs are making it even harder for renters to get ahead. While government policies like the FHSA and insured mortgage cap increases offer some help, Norman warns they may also boost demand before supply catches up, putting renewed pressure on prices【3】.
What This Means for Buyers
This week’s news points to a market in transition: rates are volatile, inventory is growing, and buyers have leverage — but affordability pressures remain real. For those fortunate enough to have a down payment ready, this could be the moment to enter the market strategically before investor activity ramps back up. For those still saving, now’s the time to tighten their plan and explore programs designed to help.
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【1】Canadian Mortgage Professional – “Buyers gain upper hand as Canadian spring housing market stalls,” Jonalyn Cueto, May 16, 2025
【2】Canadian Mortgage Trends – “Why Canadian fixed mortgage rates are rising again,” May 2025
【3】Desjardins Affordability Index – “Finding Shelter From the Trade War Storm,” Kari Norman, May 2