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Canada’s 2025 Mortgage Renewal Wave is Coming
February 21, 2025
Canada’s 2025 Mortgage Renewal Wave is Coming—And It’s a Big Problem
🚨 More than half of Canadians renewing their mortgages in 2025 expect their payments to increase, and 80% are worried about it.
This is the reality we’re heading into, according to a new poll from Royal LePage. The Canadian Real Estate Association (CREA) is echoing similar concerns. Even traditionally optimistic voices in the industry are now acknowledging the financial strain ahead.
🔗 Sources & Insights:📌 More than half of Canadians renewing a mortgage this year expect their monthly payment to increase – Royal LePage📌 2025 Mortgage Renewal Survey📌 Mortgage debt a ‘ticking time bomb’ as renewals come up, economists warn – The Globe and Mail
What’s Happening?
1️⃣ Mortgage renewals are rolling over from 2020-2021’s record-low interest rates. Many homeowners who locked in at 1.5%-2% rates are now facing renewals at 5-7%. That’s a major increase in monthly payments.2️⃣ Higher costs = more financial strain. The survey found that 81% of homeowners expect financial difficulties due to these rising payments.3️⃣ CREA and Royal LePage are signaling concern. These are organizations that historically downplay risks—yet both are now acknowledging that the renewal wave could lead to serious challenges.
The Numbers Are Alarming
📊 57% of mortgage holders renewing in 2025 expect higher payments.📊 81% say it will create financial strain.📊 22% expect their payments to increase significantly—that’s over 264,000 households.📊 Many plan to cut spending to compensate—which could further slow the economy.
🔗 Canada's Banking Head Warns of 2025/2026 Mortgage Renewals🔗 Canadian housing market 'sluggish' despite mortgage rule changes
How Could This Impact the Housing Market?
🏡 More distressed selling? With higher payments, some homeowners may have no choice but to list their homes, increasing housing supply.📉 Slower demand. Rising mortgage costs could discourage new buyers from entering the market, keeping sales low despite falling prices.⚠️ Economic slowdown. With thousands of homeowners cutting spending to cover mortgage increases, consumer demand in other sectors could take a hit.
🔗 New Listings Jump to Start 2025 as Tariff Uncertainty Weighs on Sales🔗 Majority of homeowners expect monthly mortgage payments to rise upon renewal in 2025, survey finds
What’s Next?
Even Royal LePage CEO Phil Soper, who was previously optimistic, is now urging homeowners to prepare for financial strain. This shift in messaging suggests that the industry is finally acknowledging the risks.
With over 1.2 million mortgages set to renew, this is not a niche issue—it’s a major economic concern that will unfold over the next 12-24 months.
💬 Are you facing a mortgage renewal in 2025? How are you preparing for the higher payments? Let’s discuss.
#RealEstate #MortgageRenewal #HousingCrisis #Finance #InterestRate
Toronto’s Real Estate Market: January 2024
February 20, 2025
Toronto’s Real Estate Market: January 2024 Update & What It Means for Buyers
The Toronto Regional Real Estate Board (TRREB) has released its January 2024 real estate data, revealing a significant shift in the market. The numbers show a drop in sales, a surge in new listings, and a rise in available inventory. But what does this actually mean for buyers and sellers in the Greater Toronto Area (GTA)?
While some headlines claim that “home sales rebounded by 10% in January,” the reality is more complex. Yes, sales have increased from December, but that’s expected—December is historically a slow month because fewer people buy homes during the holiday season.
The bigger picture? Sales are still down year over year, making January 2024 one of the weakest starts to the real estate market in over a decade. With an increasing number of listings and inventory sitting on the market, even TRREB is now predicting a buyer’s market for 2025—a major shift from their previous forecasts.
Let’s break down the January 2024 real estate data, explore TRREB’s changing outlook, and discuss what this means for buyers, sellers, and investors moving forward.
Toronto Real Estate Prices in January 2024
One of the most closely watched figures in the housing market is home prices. In January, different price metrics showed mixed results:
- Benchmark Price: The price of a home that represents the most common set of features in Toronto rose slightly. It increased from $1,162,000 in December to $1,170,100 in January—a modest $8,000 gain month-over-month.
- Average Price: Unlike the benchmark, the average home price in Toronto fell from $1,167,000 in December to $1,141,000 in January, a $26,000 decline in just one month. Compared to January 2023, the average price is also down $14,000 year-over-year.
- Median Price: This is the middle price point of all home sales. It dropped from $930,000 in December to $910,000 in January, a $20,000 drop month-over-month. However, it's still up by $10,000 compared to January 2023.
What Do These Price Trends Mean?
While the benchmark price has inched up, the average and median prices have dropped, indicating that more lower-priced homes are selling while luxury home sales have slowed.
For buyers, this means more negotiating power—especially as we head into the spring market with record-high inventory levels.
If you're thinking of buying, now is the time to explore pre-approval options and secure the best mortgage rates. Check out Simple Home Financing for expert guidance on mortgage pre-approvals and financing solutions.
Toronto's Rising Housing Inventory: A Buyer’s Market in the Making?
The months of inventory (MOI) is a key measure of supply and demand in the housing market. It tells us how long it would take to sell all available homes if no new listings were added.
- In December 2023, the MOI was 3.4 months
- In January 2024, the MOI rose to 3.5 months—the highest in 12 years
A higher MOI means more homes are available relative to the number of buyers, giving buyers the upper hand in negotiations.
Additionally, the sales-to-list price ratio (SLPR)—which measures how much over or under asking price homes sell for—rose from 98% in December to 99% in January. However, this can be misleading, as some sellers purposely underprice homes to trigger bidding wars, skewing the ratio upward.
Record Number of New Listings Flood the Market
One of the most striking trends in January 2024 was the surge in new listings:
- 12,500 new listings were added in January—the highest number of new listings for any January in the past 12 years.
- With more homes being listed and fewer sales happening, the total number of active listings has skyrocketed, meaning homes are sitting on the market longer.
This increased inventory is a major advantage for buyers, allowing for:✅ More choices in the housing market✅ Less competition on most listings✅ Better negotiating power (buyers can request conditions like home inspections and financing approvals)
For sellers, this shift means pricing your home competitively is crucial. Homes that are priced too high may sit on the market longer, forcing price reductions.
What TRREB Says About the Market & What’s Next
For months, TRREB and other market analysts have predicted that lower interest rates would bring back a flood of demand, driving home prices up again. However, even TRREB is now acknowledging that inventory levels are too high for a quick recovery.
Their latest market analysis suggests that 2025 could be a strong buyer’s market, as sellers adjust to new conditions. TRREB’s Chief Market Analyst, Jason Mercer, even noted that:
“With so much inventory available, that’s going to lead to a lot of negotiating power for buyers.”
However, TRREB still believes that lower mortgage rates will boost demand later in the year.
While it’s true that the Bank of Canada has started cutting interest rates, the economic uncertainty caused by global factors—such as trade tensions with the U.S.—could slow down the real estate market recovery.
For now, buyers remain in a strong position, but it's essential to secure the best mortgage rates and financing terms. If you're considering a home purchase, visit Simple Home Financing to explore your options.
What This Means for Buyers & Sellers in Toronto
For Buyers:
🏡 More inventory means less competition and more room to negotiate.💰 Prices are softening, making it a good time to buy before interest rates drop again.📉 The market favors buyers, so you can take your time and make informed decisions.
For Sellers:
📉 Overpricing is risky—homes priced too high are sitting on the market longer.💼 Marketing and presentation matter more than ever to attract buyers.🔄 Flexibility in pricing and conditions will be key to selling in this market.
If you're planning to sell, working with an experienced real estate agent can help you navigate this shifting market effectively.
Final Thoughts: Is Now the Time to Buy in Toronto?
Toronto’s January 2024 real estate data highlights a market in transition. With record-high inventory levels and softening prices, buyers have the advantage—something that hasn’t been the case in Toronto for years.
Whether you’re looking to buy your first home, upgrade, or invest, getting pre-approved for a mortgage is the best first step. Visit Simple Home Financing to explore financing options tailored to your needs.
As always, we’ll continue tracking Toronto’s real estate market to keep you informed. Stay tuned for more updates as we head into the spring market!
How Do I Get Pre-Approved for a Mortgage in Ontario?
February 20, 2025
How Do I Get Pre-Approved for a Mortgage in Ontario?
Buying a home is a huge financial decision, and getting pre-approved for a mortgage is one of the best steps you can take before starting your house hunt. A mortgage pre-approval helps you understand how much you can afford, locks in an interest rate, and shows sellers that you’re a serious buyer. But how do you get pre-approved in Ontario? Let’s break it down.
What Is a Mortgage Pre-Approval?
A mortgage pre-approval is a lender’s confirmation that you qualify for a mortgage based on your financial situation. It gives you a maximum loan amount, an estimated monthly payment, and a locked-in interest rate (usually for 90-120 days).
Pre-approval is not a final mortgage approval, but it provides a clear budget and makes your home-buying process smoother.
Step-by-Step Guide to Getting Pre-Approved in Ontario
1. Check Your Credit Score
Before applying, review your credit score through Equifax or TransUnion Canada. Most lenders require a score of at least 600-680, but a higher score (700+) will get you better interest rates.
If your credit score is low, consider improving it by paying down debts, making payments on time, and limiting new credit applications.
2. Gather Your Financial Documents
Lenders will need proof of your financial health. Be prepared to provide:
- Proof of Income (pay stubs, T4 slips, tax returns if self-employed)
- Employment Verification (letter from your employer or contracts)
- Debt Information (credit card balances, car loans, student loans)
- Assets & Savings (bank statements, RRSPs, investments)
- Down Payment Proof (a bank statement showing your savings or a gift letter if funds are from family)
3. Determine Your Budget
Your pre-approval amount depends on several factors:
- Your income
- Your existing debts (Debt-to-Income Ratio)
- Your down payment amount
- Current mortgage rates
A general rule is that your monthly housing costs (mortgage, taxes, utilities) should not exceed 39% of your gross monthly income.
4. Compare Lenders & Mortgage Rates
You can get pre-approved through:
- Banks (RBC, TD, Scotiabank, etc.)
- Credit Unions
- Mortgage Brokers (who compare multiple lenders for you)
- Online Lenders
Mortgage rates vary, so it’s smart to shop around for the best terms. A mortgage broker can help find the best deal for your financial situation.
5. Submit a Pre-Approval Application
Once you choose a lender, you’ll complete a mortgage pre-approval application.
The lender will:
✅ Check your credit score
✅ Review your income, debts, and assets
✅ Assess your down payment amount
If approved, you’ll receive a pre-approval letter stating the maximum mortgage amount and the locked-in interest rate (typically for 90-120 days).
6. Understand the Conditions
A pre-approval does not guarantee final mortgage approval. The lender will still assess the property itself, and your financial situation must remain stable.
Avoid making big financial changes, like:
🚫 Taking on new debt (car loans, credit cards)
🚫 Quitting or changing jobs
🚫 Missing bill payments
Why Is Mortgage Pre-Approval Important?
✔ Know Your Budget – Helps you house-hunt realistically✔ Lock in an Interest Rate – Protects you from rate increases for 90-120 days✔ Faster Mortgage Approval – Speeds up the final approval process when you find a home✔ Stronger Offer to Sellers – Gives you an edge in competitive markets
Final Thoughts
Getting pre-approved for a mortgage in Ontario is a smart first step in the home-buying process. It provides clarity on what you can afford, locks in your interest rate, and strengthens your position as a buyer.
What credit score do i need to qualify for a mortgage?
February 20, 2025
What Credit Score Do I Need to Qualify for a Mortgage in Ontario?
Buying a home is a major financial step, and your credit score plays a big role in determining whether you qualify for a mortgage. Lenders in Ontario use your credit score to assess your reliability as a borrower and decide on the interest rate you’ll receive. But what’s the minimum credit score required, and how can you improve your chances of getting approved? Let’s break it down.
Minimum Credit Score Required for a Mortgage in Ontario
While different lenders have different requirements, here’s a general guideline for what you’ll need:
- Traditional lenders (banks, credit unions, major financial institutions): Minimum 600-680
- Alternative lenders (private lenders, B-lenders): Can approve borrowers with scores below 600, but at higher interest rates
- Prime mortgage rates (best interest rates): Typically require 700+
Most major banks in Ontario prefer a credit score of at least 680 for the best rates and terms. If your score is below this threshold, you may still qualify for a mortgage, but you’ll likely face higher interest rates and stricter lending conditions.
How Your Credit Score Affects Your Mortgage Approval
Your credit score influences three key aspects of your mortgage:
- Mortgage Eligibility: A higher score increases your chances of approval.
- Interest Rate: Borrowers with 700+ scores often qualify for the lowest rates, saving thousands over the life of the loan.
- Down Payment Requirements: If your score is lower, lenders may require a larger down payment to offset the risk.
For example, a borrower with a 750 credit score may secure a 5-year fixed mortgage at 5%, while someone with a 620 score might be offered 6.5% or higher—which significantly increases monthly payments.
How to Check Your Credit Score in Ontario
You can check your credit score for free through:
- Equifax Canada (www.consumer.equifax.ca)
- TransUnion Canada (www.transunion.ca)
- Online banking apps (many Canadian banks offer free credit score monitoring)
It’s important to review your credit report regularly to catch errors or fraudulent activity that could impact your mortgage application.
How to Improve Your Credit Score Before Applying for a Mortgage
If your score is below 680, here are some steps to boost it:
- Pay Bills on Time – Late payments negatively impact your score. Set up automatic payments to avoid missed deadlines.
- Reduce Credit Utilization – Keep your credit card balance below 30% of your credit limit. If your limit is $10,000, aim to keep your balance below $3,000.
- Limit Hard Inquiries – Too many credit applications (e.g., new credit cards, car loans) in a short time can lower your score.
- Pay Off Debt – Reducing overall debt improves your creditworthiness and makes lenders more willing to approve you.
- Keep Old Accounts Open – The length of your credit history affects your score. Even if you no longer use an old credit card, keeping it open helps your credit age.
Can You Get a Mortgage with Bad Credit?
Yes, but your options may be limited. Alternative lenders (also called B-lenders) cater to those with lower credit scores, but they charge higher interest rates and may require a larger down payment (at least 20%).
If your credit score is below 600, it may be worth improving your score before applying, as this can save you thousands in interest over time.
Final Thoughts
A strong credit score can make a huge difference in your ability to buy a home in Ontario. While a minimum score of 600-680 is often required, aiming for 700+ will help you secure the best mortgage rates. If your credit score isn’t where you want it to be, start improving it now so you can qualify for better mortgage options in the future.
Need expert advice? Speak with a mortgage broker to explore your options and find the best mortgage for your financial situation!
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