The Year That Was and the Year to Come

Marci • January 2, 2018

2017 is in the rear view mirror and the road to 2018 is directly in front of us! As starting a new year is a great time to gain some perspective, let’s reflect on some of the changes brought about this last year in the Canadian housing and mortgage market, and maybe speculate a little bit about what’s to come. Mortgage writer Steve Huebl from Canadian Mortgage Trends keeps on top of things quite nicely, here are a couple of his latest articles. Let’s look forward, first, then backwards! 

 

The Latest in Mortgage News – 2018 Forecasts

It can be a chore to stay on top of the latest mortgage news these days, particularly given the barrage of forecasts and predictions for housing markets in 2018.

Unsurprisingly, the majority of forecasts for the year ahead have focused on OSFI’s new mortgage rules, including the mortgage stress test for all uninsured mortgages, which officially come into effect on January 1, 2018.

Here’s a sampling of some of the latest forecasts on where home sales and prices are headed in the new year and beyond, and the impact that the new B-20  mortgage rules  are likely to have.

CREA Forecasts Drop in Home Sales

The Canadian Real Estate Association (CREA) came out with its latest  home sales forecast  for 2018, and now expects a 5.3% drop in national sales to 486,000 as a result of OSFI’s new mortgage regulations.

That’s about 8,500 sales lower from its previous forecast. The Association also expects home prices to drop 1.4% in 2018 to $503,100.

“With some homebuyers likely advancing their purchase decision before the new rules come into effect next year, the ‘pull-forward’ of these sales may come at the expense of sales in the first half of 2018,” CREA said in a statement.

“Meanwhile, other potential homebuyers are anticipated to stay on the sidelines as they save up a larger down payment before purchasing and contributing to a modest improvement in sales activity in the second half of 2018.”

Reuters Poll Points to Smaller Home Price Gains

A recent  Reuters poll  of analysts that found home prices are expected to grow just 1.9% in 2018 (vs. the 8.5% gain seen in 2017) due to the tougher mortgage rules and an expectation for further interest rate increases.

Toronto home prices are expected to cool to 2% in 2018 and rise to 3% in 2019, while Vancouver year-over-year price gains are still expected to hit 6% in 2018 before cooling to 4.6% in 2019.

A majority of the analysts surveyed said the new mortgage rules will have a “significant” impact on housing activity, though most noted that higher interest rates pose the biggest risk.

RE/MAX Outlook Points to Growth in the Suburbs

The  2018 Housing Market Outlook  published by RE/MAX noted two distinct trends in 2017 that are expected to continue into 2018: the shift towards condo ownership in Canada’s highest-priced markets, Toronto and Vancouver, as well as a race to the suburbs for prospective homebuyers looking for better affordability.

In 2017, demand for condos in both Toronto and Vancouver continued to outpace supply, with prices increasing 16% and 22% year-over-year, respectively.

RE/MAX forecasts an overall 2.5% increase in residential sale prices in 2018 “as the desire for home ownership remains strong, particularly among Canadian millennials.”

CMHC Sees Moderating Home Price Increases

The Canada Mortgage and Housing Corporation (CMHC) is forecasting continued growth in home prices in its  Housing Market  Outlook , but at a more moderate pace.

It expects MLS average home prices to increase from a range of $493,900-$511,300 in 2017, to a range of $499,400-$524,500 by 2019.

CMHC also provided its forecast on expected interest rate increases over the near-term horizon: “In our baseline scenario, the posted 5-year mortgage rate is expected to lie within the 4.9%-5.7% range in 2018 and within the 5.2%-6.2% range in 2019.”

The Contrarian View

The folks over at CIBC don’t foresee OSFI’s new regulations having much material impact on the housing markets in both Vancouver and Toronto, at least not over the long run.

In case you missed the research note from CIBC’s deputy chief economist Ben Tal, he  wrote that government efforts to cool the Toronto and Vancouver housing markets will do little more than soften Canada’s two most expensive housing markets.

“On the surface [the stress test for uninsured mortgages] reduces the purchasing power of typical buyers by close to 20%, and we estimate that no less than 10-15% of mortgage originations will be impacted by that move. However, the actual reduction in demand is likely to be much less significant,” Tal wrote. “We suggest that the combination of the creative imagination of borrowers, some exceptions to the rule and increased activity among alternative lenders will soften the blow to the market as a whole with actual demand slowing by only 5-7% in the coming year.”

Tal also cites supply constraints for new housing development, particularly in Toronto, along with long-term housing demand in Toronto and Vancouver from new immigrants and non-permanent residents as increasing price pressure over the long run.

 

2017 – A Year in Review

As we count down the final days of 2017, we look back on a year that presented fresh challenges for the mortgage industry with the announcement of yet more mortgage rule changes.

While OSFI’s B-20 changes dominated headlines during the later part of the year, here are some of the other top mortgage newsmakers for 2017:

Rate Movements

After two years with the overnight target rate stuck at 0.50%, the Bank of Canada began a new rate hike cycle with quarter-point increases in July and September, with more hikes widely expected in 2018. 

The most important benchmark for fixed-rate pricing is the  5-year government bond  and in 2017 we were reminded of how fast 5-year yields can climb.

Stock Moves

Finally, here’s a look at the performance of Canada’s big banks along with the public companies that make the majority of their revenue in the mortgage business.

1  Discounted mortgage rates reflect estimates taken from the most competitive lenders’ rate sheets, as of December 31.

2  RBC’s 5-year  non-redeemable GIC  with monthly interest is used as a proxy for GIC rates. In reality, some lenders have to pay notably more on their GICs than RBC.

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Mortgages Aren’t One-Size-Fits-All

By Marci Deane • February 4, 2026
Why the Cheapest Mortgage Isn’t Always the Smartest Move Some things are fine to buy on the cheap. Generic cereal? Sure. Basic airline seat? No problem. A car with roll-down windows? If it gets you where you're going, great. But when it comes to choosing a mortgage? That’s not the time to cut corners. A “no-frills” mortgage might sound appealing with its rock-bottom interest rate, but what’s stripped away to get you that rate can end up costing you far more in the long run. These mortgages often come with severe limitations—restrictions that could hit your wallet hard if life throws you a curveball. Let’s break it down. A typical no-frills mortgage might offer a slightly lower interest rate—maybe 0.10% to 0.20% less. That could save you a few hundred dollars over a few years. But that small upfront saving comes at the cost of flexibility: Breaking your mortgage early? Expect a massive penalty. Want to make extra payments? Often not allowed—or severely restricted. Need to move and take your mortgage with you? Not likely. Thinking about refinancing? Good luck doing that without a financial hit. Most people don’t plan on breaking their mortgage early—but roughly two-thirds of Canadians do, often due to job changes, separations, relocations, or expanding families. That’s why flexibility matters. So why do lenders even offer no-frills mortgages? Because they know the stats. And they know many borrowers chase the lowest rate without asking what’s behind it. Some banks count on that. Their job is to maximize profits. Ours? To help you make an informed, strategic choice. As independent mortgage professionals, we work for you—not a single lender. That means we can compare multiple products from various financial institutions to find the one that actually suits your goals and protects your long-term financial health. Bottom line: Don’t let a shiny low rate distract you from what really matters. A mortgage should fit your life—not the other way around. Have questions? Want to look at your options? I’d be happy to help. Let’s chat.

Bank of Canada Rate Announcement Jan 28th, 2026

By Marci Deane • January 28, 2026
Bank of Canada maintains policy rate at 2¼%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario January 28, 2026 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The outlook for the global and Canadian economies is little changed relative to the projection in the October Monetary Policy Report (MPR). However, the outlook is vulnerable to unpredictable US trade policies and geopolitical risks. Economic growth in the United States continues to outpace expectations and is projected to remain solid, driven by AI-related investment and consumer spending. Tariffs are pushing up US inflation, although their effect is expected to fade gradually later this year. In the euro area, growth has been supported by activity in service sectors and will get additional support from fiscal policy. China’s GDP growth is expected to slow gradually, as weakening domestic demand offsets strength in exports. Overall, the Bank expects global growth to average about 3% over the projection horizon. Global financial conditions have remained accommodative overall. Recent weakness in the US dollar has pushed the Canadian dollar above 72 cents, roughly where it had been since the October MPR. Oil prices have been fluctuating in response to geopolitical events and, going forward, are assumed to be slightly below the levels in the October report. US trade restrictions and uncertainty continue to disrupt growth in Canada. After a strong third quarter, GDP growth in the fourth quarter likely stalled. Exports continue to be buffeted by US tariffs, while domestic demand appears to be picking up. Employment has risen in recent months. Still, the unemployment rate remains elevated at 6.8% and relatively few businesses say they plan to hire more workers. Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. In the projection, consumer spending holds up and business investment strengthens gradually, with fiscal policy providing some support. The Bank projects growth of 1.1% in 2026 and 1.5% in 2027, broadly in line with the October projection. A key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement. CPI inflation picked up in December to 2.4%, boosted by base-year effects linked to last winter’s GST/HST holiday. Excluding the effect of changes in taxes, inflation has been slowing since September. The Bank’s preferred measures of core inflation have eased from 3% in October to around 2½% in December. Inflation was 2.1% in 2025 and the Bank expects inflation to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply. Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is March 18, 2026. The Bank’s next MPR will be released on April 29, 2026. Read the January 28th, 2026 Monetary Report

Wait! Are You Really Ready to Buy That Home?

By Marci Deane • January 21, 2026
So, you’re thinking about buying a home. You’ve got Pinterest boards full of kitchen inspo, you’re casually scrolling listings at midnight, and your friends are talking about interest rates like they’re the weather. But before you dive headfirst into house hunting— wait . Let’s talk about what “ready” really means when it comes to one of the biggest purchases of your life. Because being ready to own a home is about way more than just having a down payment (although that’s part of it). Here are the real signs you're ready—or not quite yet—to take the plunge into homeownership: 1. You're Financially Stable (and Not Just on Payday) Homeownership isn’t a one-time cost. Sure, there’s the down payment, but don’t forget about: Closing costs Property taxes Maintenance & repairs Insurance Monthly mortgage payments If your budget is stretched thin every month or you don’t have an emergency fund, pressing pause might be smart. Owning a home can be more expensive than renting in the short term—and those unexpected costs will show up. 2. You’ve Got a Steady Income and Job Security Lenders like to see consistency. That doesn’t mean you need to be at the same job forever—but a reliable, documented income (ideally for at least 2 years) goes a long way in qualifying for a mortgage. Thinking of switching jobs or going self-employed? That might affect your eligibility, so timing is everything. 3. You Know Your Credit Score—and You’ve Worked On It Your credit score tells lenders how risky (or trustworthy) you are. A higher score opens more doors (literally), while a lower score may mean higher rates—or a declined application. Pro tip: Pull your credit report before applying. Fix errors, pay down balances, and avoid taking on new debt if you’re planning to buy soon. 4. You’re Ready to Stay Put (At Least for a Bit) Buying a home isn’t just a financial decision—it’s a lifestyle one. If you’re still figuring out your long-term plans, buying might not make sense just yet. Generally, staying in your home for at least 3–5 years helps balance the upfront costs and gives your investment time to grow. If you’re more of a “see where life takes me” person right now, that’s totally fine—renting can offer the flexibility you need. 5. You’re Not Just Buying Because Everyone Else Is This one’s big. You’re not behind. You’re not failing. And buying a home just because it seems like the “adult” thing to do is a fast way to end up with buyer’s remorse. Are you buying because it fits your goals? Because you’re ready to settle, invest in your future, and take care of a space that’s all yours? If the answer is yes—you’re in the right headspace. So… Are You Ready? If you’re nodding along to most of these, amazing! You might be more ready than you think. If you’re realizing there are a few things to get in order, that’s okay too. It’s way better to prepare well than to rush into something you're not ready for. Wherever you’re at, I’d love to help you take the next step—whether that’s getting pre-approved, making a plan, or just asking questions without pressure. Let’s make sure your homebuying journey starts strong. Connect anytime—I’m here when you’re ready.