Real Estate Blog

The housing market loves a good prediction — and lately, there’s been no shortage. Analysts, economists, and lenders alike have spent the fall debating whether the Bank of Canada will deliver one or two final rate cuts before the end of the year.

Markets are pricing in the possibility of a December 2025 rate drop to 2.25%, which would mark the lowest point in nearly four years. But as any homeowner knows, predicting what the central bank will do next is more guesswork than science.

The smarter move? Focus less on when rates might fall — and more on how you can position yourself for when they do.

What Late-2025 Rate Cuts Could Mean for You

If the Bank of Canada does trim rates again, the benefits will ripple unevenly:

• Variable-rate mortgage holders will see immediate payment relief, as lenders adjust their prime rates.

• Fixed-rate borrowers won’t feel the impact until bond yields — which guide fixed-rate pricing — decline further.

• New buyers could regain affordability, but competition may also return quickly to the market once confidence improves.

The key takeaway: Rate cuts are good news, but they don’t automatically solve affordability. Without a plan, you risk missing the window to act.

Turn Market Speculation into Mortgage Strategy

Instead of trying to “time the bottom,” the best borrowers are preparing for all possible outcomes. Here’s how to stay ready:

1. Choose Flexibility Over Prediction

If you’re buying or renewing this fall, consider shorter-term fixed mortgages (1–3 years) or adjustable-rate products. These let you take advantage of future cuts without locking in at today’s higher long-term rates.

Many Canadians who chose five-year fixed terms in 2022 are now paying the price for that rigidity. Don’t repeat the same mistake on the way down.

2. Review Your Prepayment Privileges

Even if rates drop later, your biggest savings can still come from reducing principal faster. Use your lender’s prepayment allowance — often 10%–20% annually — to get ahead while rates remain manageable.

A broker can help calculate how even an extra $100–$200 per month could shorten your amortization by years.

3. Stay Rate-Hold Ready

If you’re a potential buyer, secure a rate hold now. Most lenders will freeze a rate for up to 120 days. If rates fall, you automatically get the lower one; if they rise, you’re protected.

This lets you shop with confidence — not anxiety.

4. Keep an Eye on Refinancing Opportunities

If you’re locked into a higher fixed rate, a rate drop could open doors to refinance early — even with a penalty. Sometimes, the savings over the new term outweigh the cost of breaking the existing one.

Mortgage brokers can model this for you precisely — including penalty coverage options, like using a HELOC to offset the cost.

Example Scenario: Acting Early vs. Waiting

Let’s say you have a $500,000 mortgage at 5.5% fixed with two years remaining. If rates fall to 4.5% in early 2026, refinancing could save you $5,000–$7,000 in interest over the next three years — even after paying a moderate penalty.

But if you wait until renewal and rates rebound slightly, those savings may disappear.
That’s why it’s less about guessing — and more about staying positioned for opportunity.

The Balanced Approach

The temptation to wait for the “perfect” rate is understandable, but most homeowners win by managing risk, not chasing predictions. The market will always move faster than headlines — and brokers can act faster than banks when it does.

A well-structured mortgage should feel adaptable. It should work in today’s environment but be flexible enough to pivot when tomorrow’s rates shift.

Ottawa’s market continues to be resilient despite broader concerns about economic uncertainty. In October, Ottawa’s housing market experienced a modest, seasonal increase in sales activity accompanied by a reduction in the elevated inventory levels seen in recent months. This points to a stable yet cautious phase for the region as we move into the typically slower winter season.

Last month, a total of 1,177 homes were sold, up 8.1% from 1,089 in September 2025, but down slightly year over year with a 1.2% decrease compared to October of 2024. The average sale price climbed to $709,002, an increase of 2.7% month over month and 5.7% higher than the same period last year, suggesting that underlying demand remains resilient.

The Bank of Canada’s second consecutive rate cut on Oct. 29, 2025, lowered the policy rate by 25 basis points to 2.25%, providing additional relief to borrowers and some optimism for an active spring market. However, the bank tempered expectations for further easing, noting in its statement that this is likely the final cut in the current cycle. The Ottawa Real Estate Board (OREB) is monitoring the newly released federal budget and workforce announcements, as cuts in either area have historically affected Ottawa’s housing market given the city’s large federal employment base.

Overall, Ottawa continues to display a pattern of measured balance, modestly improving demand, steady prices, and a market environment that remains fundamentally healthy as it heads toward year-end.

“Ottawa’s market continues to demonstrate balance and resilience,” said OREB’s President. “We’re seeing modest growth in sales activity, stable pricing, and a seasonal easing of elevated inventory levels. The recent rate adjustments provide optimism for the coming months, but economic uncertainty looms, and buyers and sellers remain cautious, watching how broader economic factors play out. The current environment points to a steady market rather than a rapid shift in either direction.”

Ottawa saw 2,405 new listings in October, a 15.1% decline from September 2025, but 13.4% higher than October 2024. This seasonal drop off in new listings between September and October has been a consistent pattern over the past decade. More notably, active listings fell from 4,388 in September to 4,232 in October, a 3.6% decrease. While inventory levels remain higher than in recent years, this familiar fall decrease in active listings suggests that the trend towards elevated supply levels may be starting to stabilize, still within a balanced market range. Reinforcing that trend, the months of inventory measure eased from 4.0 to 3.6, indicating a modest tightening in the balance between buyers and sellers as the fall market settled.

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Last month, thousands of people across twelve Canadian cities walked to raise awareness and crucial funds for local women’s second-stage housing/transitional shelters and housing support programs. The third annual Royal LePage® Shelter Foundation™ Night Light Walk™, presented by TD, addresses the urgent need for safe, affordable housing for individuals and families escaping domestic violence.

According to Women’s Shelters Canada, 99.5% of shelter staff and survivors report their community is facing a housing crisis. Intimate partner violence impacts 44% of women and girls in an intimate partner relationship. And, on any given day in Canada, 3,000 women and their 2,500 children are living in an emergency shelter to escape family violence. While these emergency shelters provide immediate safety, they are not meant to meet long-term housing needs.

Second-stage housing — longer-term accommodation for women no longer fleeing immediate abuse but still needing support and safety — is vital. Due to a shortage of this type of housing and underfunding of existing second-stage housing, survivors are left without a clear path to long-term stability.

Funds raised by Night Light Walk participants expand transitional housing initiatives through new builds and renovations, and provide essential resources like trauma counselling, legal assistance and positive parenting programs. In communities without transitional housing, funds support emergency shelter programs, where longer-term and affordable housing is sought.

Last year alone, over $315,000 was raised at the Night Light Walk. This contributes to the Royal LePage Shelter Foundation’s total of over $52 million raised since its inception in 1998, supporting over 200 local women’s transitional shelters and national partners.

Despite Improving Affordability, Majority of First-Time Homebuyers Say They Plan to Buy in 12–24 Months

Canada’s housing market may be opening new doors for first-time buyers, thanks to lower borrowing rates, softer prices and more listings to choose from. But uncertainty in the economy and an abundance of choice have led to a lack of urgency to buy, prompting many young Canadians to take their time before entering the market.

According to a recent Royal LePage survey, conducted by Burson*, 13% of Canadian adults say they are actively working towards the purchase of their first residential property within the next two years. Of this group, a small proportion say they are working towards their first purchase within the next 12 months, while the majority (82%) say they are planning to make a purchase in 12 to 24 months.

When asked what stage of the purchasing process they are in, more than half (51%) of first-time buyers said they are currently researching neighbourhoods where they can afford to live, 49% are actively browsing online listings, 19% are actively viewing homes listed for sale in person, and 19% have engaged with a real estate agent. Respondents were able to select more than one answer.

“Interest rates are trending lower and prices have stabilized or even softened in some markets, creating favourable conditions for long-awaited entry into home ownership, especially in costly cities like Toronto and Vancouver. Yet, hesitation remains,” said Phil Soper, president and CEO, Royal LePage. “For some, ongoing economic uncertainty, particularly surrounding trade relations with the United States, is prompting them to hold off until there are signs of stability. Buying a home is the biggest financial decision most people will ever make, and first-time buyers naturally want to do so with as much certainty as possible.”

“Others are choosing to wait in hopes of securing a better deal. With the potential for further rate cuts from the Bank of Canada this year, those in no rush to purchase now are taking a methodical approach — building up their savings and deliberately planning their entry into the market when they feel the timing is best for them.”

Other Interesting Highlights from the Survey:

• More than half (53%) of first-time buyers plan to put at least 20% down on their purchase; while 39% will not and will therefore need to buy mortgage insurance.

• 42% of first-time buyers say they will prioritize the neighbourhood where they want to live, regardless of the distance to their job, while 33% say they will purchase a home based on proximity to work.

• Finding a home that is move-in ready is the most important non-price related factor for first-time buyers, according to Royal LePage professionals across the country.

Financial Support Continues to Flow from Family to First-Time Buyers

While many buyers continue to rely on help from family to make their first home purchase, most do not. When asked if they would receive any financial assistance towards the purchase of their first residential property, more than half (51%) said they would not receive any help. Meanwhile, 41% of first-time buyers said they would. Even as affordability has improved in several markets over the past year, many first-time purchasers continue to rely on financial support to take their first step onto the property ladder.

“Despite improving affordability, many first-time buyers continue to rely on family financial support. This transfer of wealth has become increasingly common, as parents look to give their children the same opportunity for stability and long-term financial growth that they themselves experienced through home ownership. For some buyers, financial contributions from family can make the decisive difference between becoming a homeowner and remaining a tenant,” said Soper.

“However, many lack access to this kind of support, forcing them to adopt more creative and often difficult approaches to saving. Some delay major life milestones, such as marriage or starting a family, in order to prioritize home ownership. Others cut back significantly on discretionary spending, or continue living at home with parents well into adulthood to build up their savings. While determination and careful planning help these buyers reach their goals, the gap between those who receive financial assistance and those who do not highlights the deep affordability challenges in today’s market.”

*Burson used the Leger Opinion online panel to survey 2,500 adult residents across Canada. The survey was completed between August 4 and August 9, 2025. Age, gender and regional quotas were applied to ensure representativeness of the adult-level Canadian population.