Your Weekly Update on Rates, Trends & Opportunities
Inflation is easing—but not in the areas that matter most to the Bank of Canada. Bond yields are rising, pushing fixed rates up. Meanwhile, Toronto condos are down—but many other Canadian markets are still climbing.
Bond Yields Jump—Here’s Why That Matters
- Canada’s 5-year bond yields rose Friday morning after inflation data came in slightly hotter than expected.
- Why it matters: Fixed mortgage rates are based on bond yields. When bond yields go up, lenders raise mortgage rates to match.
- For those shopping or renewing soon, expect higher rates unless your lender has locked yours in.
Core Inflation: What’s Really Going On?
- Headline inflation dropped to 1.7% in April, mainly due to lower energy prices.
- But core inflation, which strips out volatile items, remains high. The BoC’s CPI Trimmed-Mean hit 3.1%—above their comfort zone.
- Translation: A rate cut at the next Bank of Canada meeting is unlikely.
Two Housing Markets: One Country
- From April 2024 to April 2025, condo prices in Toronto dropped by 3.4% in the 416 and 4.8% in the 905—shrinking equity for many upsizers.
- In contrast, cities like St. John’s (+9.2%), Quebec City (+16.7%), and Edmonton (+11%) saw strong price growth.
- It’s a clear reminder: not all real estate markets move the same way.
Perspective
Rising fixed rates and declining condo equity in Toronto are squeezing move-up buyers. But smart planning—especially with new insured mortgage rules for homes under $1.5M—can keep the path open.
Let’s build a mortgage plan that fits.
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Sources:
- Canada CPI – Trading Economics
- BoC CPI Trimmed Mean
- Canadian Mortgage Professional – “Toronto condo slump leaves move-up buyers in the lurch”
- Globe & Mail – “Eight smoking hot housing markets across Canada”