Welcome to 2025! We aren’t even 6 weeks into the year, and it’s already been a year of upheaval. The political landscape changes hour to hour thanks to our friends down south. This has created a sense of panic and uncertainty in Canadian politics and all aspects of Canadian society. With so much misinformation circulating, let’s concentrate on facts and what we know to be true.
If there is one question we at Tate Homes get asked more than anything else, it would be, “How is the Real Estate market going to respond?” It would be naive to say the state of affairs globally and nationally doesn’t have any effect on the Toronto housing market. They do, but how much? Is it a positive or negative effect? How does it affect the buying or selling of a home? Unfortunately, there are no crystal balls or magic eight balls to provide the answers to these questions; the answers to these questions are subjective and vastly different depending on who you talk to.
Here’s what we do know: In 2025, approximately 1.2 million fixed-rate mortgages are coming up for renewal (Canada-wide). The majority of these mortgages were assigned during the pandemic. At the time, interest rates were below 1%. Those days are gone, and renewing your mortgage in today’s environment would include an interest rate somewhere around 4%. That’s a number that, unfortunately, a lot of Canadians will not be able to afford. The 6 major Canadian banks (RBC, TD, BMO, CIBC, Scotia, and National) are fully aware of this and the battle to keep and attract new clients has already begun.
Competition is good for us, the consumer. Competition drives prices down and offers more selection opportunities. The average Canadian monthly mortgage payment sits at $1984. This is already 40% higher than it was just 5 years ago. Total mortgage debt in Canada is currently north of 150 billion! The Canadian banks are scrambling to secure the largest piece of the pie possible. Here are some examples of the promotions and rates being offered:
–TD is focused on growing its RESL (Real Estate Secured Lending) division. They are currently offering a cash bonus of $4,100 for opening a new mortgage or HELOC (Home Equity Line Of Credit). Their 3-year fixed rate sits at 5.09%, down from 6.94%.
–RBC rates are even lower at the time of publication. Canada’s largest bank offers 4.89% on 3 and 5-year mortgages (or 4.95 on a variable rate). They are giving away rebates and Avion rewards to any switches or new mortgages.
–CIBC’s rates match RBC. They have committed to renewing the mortgages that are coming up for renewal as well as attracting new customers with a $4500 cashback promotion for anybody willing to switch lenders.
–BMO is looking to expand with a $4100 offer to potential clients. They are currently offering a 4.59% rate on 5-year fixed mortgages.
–Scotiabank has introduced its Scotia Mortgage+ program, which offers discounts and “preferred” mortgage rates for bundling multiple banking products together (Investments, mortgage, insurance, credit cards, etc.).
–The National Bank, which has 80% of its mortgages in Quebec, is offering $5,800 for mortgage transfers.
With the Bank of Canada continuing to see inflation stabilize, the majority of prognosticators are projecting further rate cuts, although at a slower pace. The Bank of Canada currently sits at a manageable 3%. So what does all this mean? At Tate Homes, we firmly believe all signs point to a robust Spring market. We are already starting to see Inventory rise, and with that, demand is increasing. After a very quiet 2024, all signs are pointing to a very loud 2025. This is your year and your time! Tate Homes is here to guide you through every step of the process. Give us a call today, and let’s get started!