Back to Reality: Stubborn Rates, Softer Prices, and a Cautious 2026

📊 Rate Watch: Why Slower Growth Doesn’t Guarantee Lower Fixed Rates

A Softer Economy, But Not a Clear Signal:

As we move deeper into 2026, the Canadian economic picture is sending mixed messages. Growth has held up better than many expected, but much of that strength comes from government spending, trade dynamics, and consumers leaning on savings and debt. Job creation continues, though many new roles are part-time or lower paying, and confidence among households and businesses remains fragile.

Central Bank Cuts vs. Market Reality

When economies cool, central banks usually respond with rate cuts — and both the Bank of Canada and the U.S. Federal Reserve have already done a lot of the heavy lifting. That’s good news for variable-rate borrowers, whose rates move with policy decisions.

Fixed mortgage rates, however, follow a different path. They’re driven by bond yields, and Canadian bonds are heavily influenced by U.S. Treasury markets. Despite rate cuts south of the border, U.S. bond yields have moved higher due to persistent inflation concerns — and that’s limiting downward pressure on fixed rates here in Canada.

What This Means for Borrowers

Fixed rates are sitting near long-term averages and may stay range-bound with a slight upward bias. That’s why locking in strong opportunities matters. If you’re looking to buy soon, or have a renewal coming up lock your rates early. The chances of fixed rates drifting upwards, at least in the first few months of 2026 is high.

Insider Highlight: I currently have access to a 3.79% 5-year fixed rate for refinances, a standout option in today’s market.

Choosing between fixed and variable still comes down to risk tolerance, cash flow, and long-term plans — and this is where strategy and structuring matters more than headlines. Please reach out today to discuss your mortgage needs.

Real Estate Radar: Closing 2025 with More Choice, Softer Prices

GTA: Affordability Improves, Buyers Stay Cautious

The Greater Toronto Area wrapped up 2025 with clearer signs of a buyer-leaning market. December sales came in at 3,697 transactions, down 8.9% year-over-year, while new listings rose 1.8%, keeping inventory elevated. This imbalance gave buyers more negotiating power, pushing the average selling price down 5.1% year-over-year to $1,006,735.

Detached homes remained the priciest segment, averaging just under $1.5M, though prices were still down nearly 6% from last year. Condos and townhomes continued to see the sharpest sales slowdowns, reflecting affordability pressures and changing buyer preferences. On an annual basis, GTA sales fell 11.2% in 2025, while average prices declined 4.7%, reinforcing that 2025 was a year of adjustment rather than growth.

Waterloo Region: Inventory Builds, Prices Reset

Waterloo Region echoed similar themes, with December sales down 9.5% year-over-year and inventory climbing nearly 16%. The average December sale price landed at $716,911, down 5.9% from last year but slightly higher than November, hinting at early stabilization.

Condo apartments stood out on the downside, with December prices plunging nearly 23% year-over-year, while detached homes proved more resilient. By year-end, total inventory translated into a 2.3-month supply, though condos faced much higher supply levels at 4.9 months.

Looking Ahead to 2026

Both markets ended 2025 with improved affordability, more listings, and longer selling times. If economic confidence and job stability improve—as industry leaders suggest—this foundation could unlock pent-up demand in 2026. For buyers, patience and selection improved. For sellers, pricing accuracy became non-negotiable.

🍁 📊 Maple Pulse: New Year, Old Problems: Rates, Rents, and Renewals

As 2026 kicks off, hopes for a housing rebound are being tempered by familiar headwinds. While interest rates are stabilizing, affordability remains out of reach for many, and mortgage renewals are delivering sticker shock across the country. From Toronto’s deepening market slide to modest relief at City Hall, here’s what’s shaping the real estate and mortgage landscape this January.

2026: Stable Rates, Gradual Housing Recovery​: Canada’s housing market is projected to see a measured recovery in 2026 as lower interest rates work through the system, supporting demand but colliding with persistent affordability and supply constraints. Economists expect sales to rise modestly, with price growth generally subdued and varying by region. Forecasters see the Bank of Canada holding its policy rate around 2.25% for most or all of 2026, keeping borrowing costs relatively stable but not exceptionally cheap. Markets also assign growing odds to eventual rate hikes, limiting the upside for prices and speculative activity. (Ron’s Take: I agree that 2026 should feel a lot more stable on the mortgage-rate front compared to the roller coaster we’ve been on over the last few years. Where I’m a bit less sold is on the idea of broader economic stability. If things were “normal” globally, this could’ve been a year of slow but steady recovery. But we don’t have a calm, predictable neighbour to the south right now. With Trump back in the picture and CUSMA renegotiations likely on the table, there’s real potential for trade and economic disruptions that could spill over into Canada pretty quickly.)

Borrowers Who Waited for Lower Rates Now Face Higher Costs:​ Many Canadian mortgage borrowers who delayed renewing, hoping for lower rates, are now confronting higher fixed-rate offers in the low 4 per cent range instead of about 3.7 per cent last fall, increasing monthly payments. Variable rates have fallen more than fixed since 2024, but are expected to hold near current levels as the Bank of Canada keeps its policy rate steady. With more than a third of homeowners set to renew by the end of 2026, experts warn that waiting for a “perfect” rate can backfire, especially as bond-yield-driven fixed rates edge up. (Ron’s Take: Making a mortgage decision based mostly on rates is almost always a mistake. Rates matter, of course—but they’re just one piece of the puzzle, and honestly, not even the most important one. Yes, fixed rates came down for much of last year, just like many of us expected. But today, fixed rates are already sitting close to their long-term averages. Waiting around for the “perfect” rate from here is risky, and for many borrowers, it may end up costing more than it saves.)

Pandemic-Era Borrowers Face Sharp Payment Shock in 2026: More than a million Canadian homeowners renewing in 2026, many from early-pandemic lows, could see mortgage payments jump about 20 per cent as rates move from roughly 1.5–3 per cent to around 4–4.09 per cent. On a typical $550,000 mortgage, that’s about $550 more per month, or roughly $6,500–$6,600 per year, significantly straining household budgets. Experts expect most owners to cut spending or savings rather than sell, since they originally passed a 5.25 per cent stress test and rents are not much cheaper. Extending amortizations can lower payments but greatly increases total interest paid. (Ron’s Take: Let’s be honest—if you’re coming off a 1.5% mortgage and renewing soon, your payment is going up. There’s no sugar-coating that. The good news is, how big that increase is can be planned for. With the right timing, structure, and strategy, the jump doesn’t have to be painful. Over the past several months, I’ve been able to help many clients meaningfully reduce the impact of their renewals. If yours is coming up, the earlier you start planning, the more options you’ll have—so don’t wait to reach out.)

Toronto Housing Slump Poised to Erase Six Years of Gains: Toronto’s housing market is expected to keep sliding through 2026, potentially pushing prices back to 2020 levels and erasing six years of gains. Economic uncertainty, trade-related job losses, and AI-driven labour disruption are undermining consumer confidence, while high supply in both condos and freeholds keeps downward pressure on prices. Royal LePage and Re/Max forecast GTA prices falling 3.5 to 4.5 per cent, with some experts warning of declines exceeding 30 per cent from peak, especially in oversupplied small condos as investors retreat. Interest rates are expected to hold around current variable levels, but fixed rates may rise. ​(Ron’s Take: The run-up to the early-2022 peak was never sustainable. It was largely fuelled by ultra-low pandemic rates, and once that money printer was turned off, a reset was inevitable. What we’re seeing now isn’t a crash—it’s the market working its way back toward more normal levels. From my perspective, this is actually a healthier environment, especially for buyers who’ve been sitting on the sidelines. For first-time homebuyers in particular, today’s market offers far more opportunity than the frenzy we saw a few years ago.)

Toronto Plans Modest 2026 Property Tax Hike Amid $1B Shortfall: Toronto Mayor Olivia Chow is proposing a 2.2 per cent residential property tax increase for 2026, far lower than the 9.5 and 6.9 per cent hikes of the previous two years. The increase combines a 0.7 per cent tax hike with a previously approved 1.5 per cent city building levy for transit and housing. This comes despite a roughly $1 billion operating shortfall, rising TTC and police budgets, and weaker revenues from real estate and other fees. Supporters frame the plan as protecting affordability and services, while critics warn of opaque accounting and possible overuse of reserve funds. (Ron’s Take: This one’s specific to Toronto homeowners, and it’s really more of an FYI than anything else. I’m not getting into the politics of the increase. The reason it matters is that property taxes factor into mortgage qualification, especially for anyone planning to buy this year. That said, compared to the last two years, this increase is relatively modest—which should come as some relief for Toronto buyers and homeowners alike.)

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🏡 Mortgage Mastery: Your Mortgage, Decoded

Mortgages don’t need to feel overwhelming—but too often, they’re explained in a way that makes them feel exactly that. Mortgage Mastery is all about cutting through the jargon and giving you clear, practical explanations so you can make confident decisions about one of the biggest financial commitments of your life. Let’s start with the basics and decode how a mortgage really works.

Principal: The Amount You Borrow

The principal is simply the price of your home minus your down payment.
Buy a $700,000 home with a $140,000 down payment? Your principal is $560,000. This is the number your mortgage payments are working to shrink over time.

Interest: The Cost of Borrowing

Interest is what the lender charges for lending you the money. It’s calculated as a percentage of your remaining balance. Early on, a bigger chunk of your payment goes toward interest. Over time, more of your payment attacks the principal. This shift is built into every mortgage.

Term: Your Rate’s Expiry Date

The term is how long your mortgage agreement lasts—commonly 1 to 5 years. When the term ends, you renew, refinance, or pay it off.
Important: your term is not how long you’ll have the mortgage.

Amortization: The Long Game

The amortization period is the total time it takes to fully pay off your mortgage—often 25 or 30 years. Longer amortizations mean lower payments, but more interest over time.

The Big Picture

Think of your mortgage like a road trip:

• Principal: distance to travel

• Interest: fuel cost

• Term: fuel price lock

• Amortization: total journey length

Once you understand the parts, the decisions become much clearer—and far less intimidating.

Memes: Back to Reality, Beetlejuice Edition

🕴️☕ That moment when the holiday break ends, your inbox explodes, and you’re expected to be productive again… like nothing happened.

Whether you're navigating mortgages, market moves, or mastering your next milestone, surround yourself with people who challenge and inspire you. Growth lives just outside your comfort zone.