Mortgage Predictions for 2025: A Closer Look
2025 is expected to bring unexpected challenges and opportunities in the Canadian housing market. Here’s a concise overview of the key trends:
-
Debt Trends: Many homeowners will face longer mortgage terms as debt-service ratios stagnate, leading to increased affordability concerns.
-
Interest Rate Expectations: Despite current lower rates, there’s uncertainty about whether they’ll rise or fall in 2025. Brokers may push lower rates on existing mortgages, while new offerings could attract borrowers with higher debt levels who don’t need to pass the stress test now.
-
Switching Volumes: Mid-year rate hikes could prompt thousands of homeowners to switch lenders without passing the stress test, creating a competitive environment for remaining loans.
-
Deposit-Taking Lenders: Banks that take deposits without offering other financial services are pushing customers into higher-cost products like credit cards and auto loans due to a lack of competition from monoline lenders.
-
Market Uncertainty: While some expect rates to fluctuate, the exact direction remains unclear, with market conditions playing a significant role in determining outcomes.
This year’s mortgage landscape is poised for dynamic changes, making it crucial to stay informed about shifting trends and potential strategies to navigate them effectively.
