As we look ahead to 2025, a significant change is on the horizon for many Canadian homeowners. Over a million households with fixed-rate mortgages will soon face renewals, many with interest rates much higher than what they originally signed up for. This shift could mean more homes hitting the market as homeowners weigh their options – and it could be an opportunity for buyers and investors.

Why Are Homeowners Considering Selling?

The Bank of Canada kept interest rates historically low for years, making homeownership more affordable for many Canadians. But with the recent rate hikes, those who locked in fixed rates in the low-interest era are now facing the reality of higher payments. According to a recent report by Canada Mortgage and Housing Corporation (CMHC), approximately 1.98 million mortgages are set to renew between 2025 and 2026. Many of these homeowners will be seeing rates they haven’t budgeted for, and this financial stress might lead them to consider selling.

What This Means for the Real Estate Market

Economist Michael Davenport from Oxford Economics predicts a shift: “In the fourth quarter and early parts of 2025, we’ll see a faster rise in listings as more homeowners decide to sell.” The demand may also grow, especially as interest rates potentially ease again, creating a more balanced market. However, the short-term increase in listings could give buyers more choices, especially in markets like Toronto where supply has been tight.

Key Stat: Over 85% of fixed-rate mortgages set to renew in 2025 were initially contracted during ultra-low rates, meaning these homeowners will feel the pinch.

An Opportunity for Buyers and Investors

If you’re a buyer or investor, this influx of listings could work in your favor. With more homes on the market, you might find properties at more competitive prices, especially if owners are motivated to sell. Additionally, the loosening of mortgage guidelines might make it easier to secure financing in the middle of 2025, which could lead to a surge in demand.

Thinking of Selling?

For current homeowners, this renewal period could feel daunting. If you’re facing a higher mortgage rate, selling could be a viable option. It’s an opportunity to assess your financial goals and decide if downsizing, relocating, or cashing in on equity makes sense for you. Many homeowners in a similar position are considering their next steps.

Quick Takeaways

• Mortgage Renewals: Over a million renewals coming up in 2025, many with higher interest rates.
• Market Shift: More listings may become available as homeowners look to avoid higher payments.
• Buyer Advantage: Increased listings could mean better prices and more choices.
• Potential for Sellers: This is a chance to reassess and make a profitable move.

Stay Updated and Make Informed Decisions

As the market shifts, staying informed is your best tool. Follow our blog for more insights on real estate trends, or contact us if you’re considering buying, selling, or investing. We’re here to help you navigate these changes and make the best choices for your future.