Canadian stocks hit a new all-time high despite tariff threats and a weakening economy.

The S&P/TSX Composite Index rose 0.3% to climb above the key psychological threshold of 30,000 for the first time on Tuesday. The gauge has posted 45 closing records this year, the most since the recovery from the Covid-19 pandemic in 2021. The rally is being driven by stronger than expected earnings, a flight to shelter in gold names and easing in borrowing costs. And a fresh round of Bank of Canada interest-rate cuts is expected to stoke gains.

“It’s a big milestone obviously because it’s a nice round number,” said Philip Petursson, chief investment strategist at IGM Wealth Management, a firm with $143 billion in assets under management. He added the strength of the benchmark’s performance this year and the milestone would “drive investors to take another look at the TSX.”

The Toronto Stock Exchange is on track to outperform the S&P 500 Index this year for the first time in an up year for both markets since 2016. During that period the TSX suffered a smaller loss than the S&P 500 during the downturn of 2022.

Corporate earnings in Canada have, so far, beat expectations this year at a time when U.S. President Donald Trump has slapped the country with tariffs and when unemployment has trended higher. Amid economic weakening and trade uncertainty, earnings by TSX stocks came in 7.5% ahead of expectations and marked a new high, according to Hugo Ste-Marie, director of portfolio and quantitative strategy at Scotiabank.

“If we had to describe it in one word, we would say: wow!” Ste-Marie wrote in a Sept. 15 note.

Gold miners have been the biggest driver of the TSX rally this year as bullion prices have hit all-time highs and demand for safe haven assets amid geopolitical, trade and interest-rate uncertainty intensify.

According to Fiera Capital Corp. portfolio manager Candice Bangsund, gold represents nearly 12% of the TSX.

The benchmark’s leading sector, materials, has gained 72% this year on the the back of triple-digit gains from the likes of Discovery Silver Corp., SSR Mining Inc. and Lundin Gold Inc.

More support ahead

Bangsund, who said the Canadian equity markets is more attractively valued than its global peers, sees the materials sectors continuing to prop up the Toronto Stock Exchange through 2026.

“Even if there’s decreased demand for oil products or materials products from the U.S. from Canada, if a product like gold is becoming more expensive on net, it creates a bit of a buffer, a bit of an offset” for stocks, said Bloomberg Intelligence strategist Gillian Wolff.

Gold, which strengthens when interest rates fall, is expected to fuel further gains following rate reductions in Canada and the U.S.

“The rate cut advantages everything,” said Brian Madden, chief investment officer at First Avenue Investment Counsel. In addition to gold stocks, he noted the TSX is heavily concentrated in rate-sensitive defensive sectors including utilities and telecommunications as well and financials, all of which are likely to continue performing well.

A handful of standout individual stocks have also lifted the index. Toronto-Dominion Bank and e-commerce provider Shopify Inc., in particular, have provided the two largest boosts to the gauge this year. Shares of TD Bank staged a sharp recovery this year after a series of scandals in 2024 led to restrictions on its expansion in the U.S. and executive changes.

Overall, Canada’s banks have held up better than expected in the face of tariffs and a macroeconomic slowdown. All but one of the Big Six banks came ahead of analyst expectations in the third quarter as the country’s largest lenders set less money aside for potentially bad loans.

Shopify, meanwhile, has climbed this year to briefly become the country’s most valuable stock on a combination of “blowout” quarterly results and general strength in the tech sector.

Written by Bloomberg

Economic news

As the Bank of Canada on Wednesday lowered its overnight benchmark by 25 basis points from 2.75 per cent to 2.5 per cent, experts say homeowners looking to renew their mortgages have a chance to save.

Commercial lenders, like private banks, base their rates on the key policy rate set by the central bank. According to the Bank of Canada’s own research, 60 per cent of all Canadian mortgages will be up for renewal in 2025 and 2026.

Variable-rate mortgages are determined by the central bank’s interest rates, while fixed-rate mortgages are determined by activity in the bond market.

“Renewing a mortgage got a little easier on Wednesday, but only if you’re sniffing out a variable rate,” said Clay Jarvis, mortgage expert at NerdWallet Canada.

“Variables have dipped by up to 30 basis points at some lenders and are well below four per cent at some brokerages and online lenders.” Those looking to wait a little longer to see if the bank cuts rates further should lock down a rate sooner rather than later, said Penelope Graham, mortgage expert at Ratehub.ca.

“If you’re someone who is strongly considering getting a variable mortgage rate and you’re wondering if you should wait until perhaps October or December (for the next interest rate cut), it’s actually a great idea to get a rate hold now for up to 120 days,” she said.

“Even if we do get a couple more rate cuts, you will still enjoy whatever those lowest rates now are.” Jarvis said the Bank of Canada’s rate cut could make variable rates very tempting, but there are risks for borrowers to consider.

“Because of the affordability component, variables can look especially tasty. But it’s really important to remember that once the BoC is done cutting rates, they’ll eventually have to start increasing them,” he said.

“If you’re not comfortable with that level of risk, consider a fixed rate. Fixed rates aren’t as flexible, but they’re predictable and widely available for under four per cent.”

Whether you’re planning to renew with a fixed- or variable-rate mortgage should depend on what your housing needs are, said Leah Zlatkin, licensed mortgage broker and LowestRates.ca expert.

If you’re planning to move in a few years, a variable mortgage might make sense since it typically has a lower penalty if you want to break it.

“That’s going to offer you more flexibility should you need to break it. If everything’s going to remain consistent, and you’re good to go for the next three to five years, you can absolutely lock into a fixed,” she said.

Zlatkin recommends you start shopping for a new mortgage at least four months ahead of your renewal date.

“If you’re sitting in the five per cent range right now, it might be a good time to break that mortgage and look for a lower rate,” she said, adding that the closer to the renewal date you break your mortgage, the lower the penalty is likely to be.

What ends up costing many Canadians when renewal comes around is loyalty to their bank or lender, Graham said.

“If you are renewing with your existing lender, they send you that renewal letter and it says, ‘Hey, here’s your new renewal rate, just sign on the dotted line quick and easy,’” she said.

A recent survey said 69 per cent of Canadians end up staying with their current lender when renewing their mortgage. Another survey said three in four Canadians stick with the ‘Big Five’ banks – RBC, TD, BMO, CIBC and Scotiabank.

“It’s usually not the most competitive rate available because lenders tend to reserve those for brand new clients.”

According to Ratehub.ca analysis, Canadians end up paying $155 a month more on average if they stick with their current lender. Over a five-year period, that’s a difference of around $9,300.

In November last year, Canada’s banking regulator made it easier to switch lenders by removing the stress test requirement for a mortgage switch where the principal amount and amortization period haven’t changed.

“If you’re coming up for renewal, it’s in your best interest to at least explore your other options with other lenders,” Graham said.

Written by Uday Rana

Global News

The newly created Build Canada Homes agency will oversee plans to build 4,000 homes on six federally owned sites, as part of a $13 billion agency budget to speed up affordable home building, Prime Minister Mark Carney said Sunday.

Carney said that the $13 billion will offer financial incentives for builders to construct affordable homes and reduce upfront costs of affordable homebuilding.

Specific locations for the homes have not yet been announced, but Carney said they will be in Dartmouth, N.S., Longueuil, Que., Ottawa, Toronto, Winnipeg and Edmonton.

Construction is expected to begin on the first of these homes next year, according to a senior government official.

“The core challenge present in the housing market is it’s just too hard to build,” Carney said at a press conference in Nepean.

Carney said he’s asked his colleagues to identify land owned by government departments that can be used for housing, which will be added to the list of 88 properties on the Canada Land Bank that are available.

He said this will “help lower costs for builders and most importantly, lower the rents and new home prices for Canadian families.”

Carney said that the new agency will also look to speed up the permitting process, by giving the “green light” to bulk projects.

The government’s rental protection fund, which helps community housing groups purchase private rental units in order to keep them affordable, will continue under Build Canada Homes.

The agency uses the Canada Mortgage and Housing Corporation definition of “affordable housing”, which is costing less than 30% of pre-tax household income.

The new agency will also include a $1 billion fund for transitional housing projects aimed to help people at risk of homelessness.

Build Canada Homes is meant to be the main agency overseeing affordable housing projects that involve the federal government.

“Build Canada Homes will prioritize the use of cost-efficient and modern methods of construction, including factory build, modular and mass timber,” Carney said.

Factory-build homes, he said, can be mass-produced in controlled settings and assembled in days, enabling construction to happen in the winter.

This will include a partnership with the Nunavut Housing Corporation to build some homes off site. The partnership with Build Canada Homes is expected to build 700 homes, about 30% of which will be built off site and shipped to Nunavut, Carney said.

He said the agency will also adopt the federal government’s recently announced “Buy Canadian” policy, which is meant to prioritize the use of Canadian materials and inputs as a way to help bolster the economy in the face of U.S. tariffs.

The agency’s CEO, Ana Bailão, is a former Toronto city councillor and deputy mayor who has served on the board of Toronto Community Housing.

Written by David Baxter, The Canadian Press

Housing prices across Canada remain prohibitively high for many would-be homebuyers, and one expert says that’s partly due to Canadian seniors holding on to their homes longer than they did in the past, exacerbating a nationwide supply shortage.

“I think a lot of seniors today don’t have a better option,” Rishard Rameez, CEO and co-founder of real estate platform Zown, told BNN Bloomberg in an interview on Tuesday.

“There should be some sort of a need to move into a new home, but seniors don’t want to move into a condo where they have to use the elevators and all that. They still want to have a nice backyard where they can host family… but we don’t have those kinds of homes available for seniors.”

A 2023 Canada Mortgage and Housing Corp. report found that the proportion of Canadians older than 75 who are cashing out of the housing market fell steadily between 1991 and 2021.

“A lot of seniors actually decide to stay and age in the same place. Today, about five per cent of seniors sell their homes, compared to 13 per cent for the rest of the general population,” Rameez said.

There are also few policies in place that incentivize seniors to sell their homes in search of a better option, he explained, adding that this causes a reduction in turnover and puts pressure on real estate markets across the country.

And while inventories remain strained, younger Canadians face a “double squeeze” when the cost of renting is factored in, he argued.

“On average, young Canadians pay almost 50 per cent of their net income in rent… so it’s almost impossible for these younger Canadians to save,” Rameez said.

“Without turnover, there’s less options for people to buy from, hence these investors are able to jack up the rental prices and now Canadians are stuck paying these (high) rental prices.”

He noted that the average age of a first-time home buyer in Canada is now over 35 years of age.

“It used to be twenties, it used to be early thirties, now it’s beyond 35. Imagine someone having to pay rent for that many years before becoming a homeowner,” said Rameez.

He said Canada’s policymakers need to be looking at alternative ways to assist young Canadians in purchasing their first property, as homeownership remains a goal for many people in the country, despite the challenges it comes with.

“That’s the Canadian dream; to own your home and build a family,” Rameez said. “These aren’t just homes, these are places where people will build memories and kids will take their first steps.”

With files from The Canadian Press

Written by Jordan Fleguel

Interview of Rishard Rameez, CEO of Zown on BNN Bloomberg

Borrowers are caught in a mortgage rate market that changes by the week, with little sign of stability ahead.

With every passing week, the Bank of Canada faces conflicting economic signals, leaving Canadians guessing about its next move and triggering rapid changes in mortgage rates.

After several weeks with the lowest 5-year fixed rates holding above 4%, several lenders are now offering options in the high-3% range, generally for high-ratio borrowers.

“There was a two-month period where there were lots of rates available in the three’s … and then suddenly, everything headed for the fours over about a two-week period,” says Ron Butler of Butler Mortgage. “Then bond yields took a roughly 25 basis-point reduction, and now we’re back in this very aggressive state.”

Butler notes that while not every lender has followed suit, a number are again pricing select terms below 4% in the past few days, a trend that could just as easily swing back.

“Every single news item to do with interest rates, both here and in the United States, can trigger a change in bond yields and rates,” Butler says. “What we urge people to understand is that it is that volatile; rates can all go back into the fours very soon.”

Conflicting economic signals

The current volatility isn’t driven solely by the trade war and uncertainty over long-term policy, though both play a role.

According to rate expert Ryan Sims of TMG, the market is still trying to figure out how past changes to trade policies and leadership regimes are affecting both Canada and the United States.

“We’ve got two opposing forces right now and the bond market is reacting to every single report,” he says. “You’ve got inflation in Canada slowly creeping up bit by bit, but then you’ve also got the horrible jobs numbers we saw last week.”

High inflation typically pushes the Bank of Canada to raise rates, while weak employment and a slowing economy point to cuts. What’s unusual now is that both forces are appearing at once, Sims says.

Further complicating the matter is the American economic picture, which directly influences Canada’s 5-year bond yield, and with it, fixed mortgages. Though there are some cracks starting to form, the U.S. economy appears to be outpacing expectations.

“Whether you agree with the current administration or not, the data is coming in strong — employment is healthy, GDP is growing at a good clip, inflation is fairly malignant right now — so I don’t think you’ll get the rate cut from the U.S. Fed that everyone was banking on this year,” Sims explains. “It’s a lot harder for the Bank of Canada to cut when the U.S. Fed isn’t cutting.”

Even as the Bank of Canada shows little inclination to cut its policy rate, which drives the prime rate and variable borrowing costs, Canada’s big banks have been lowering mortgage rates after earlier hikes to win over renewers in a slow market.

“They’re being very competitive on rates, and it makes sense, because they’re going to gain some market share, they’ve now got that customer they can cross-solicit to open a bank account, an investment account, a credit card, what have you,” Sims says. “As we approach [their fiscal year-end on] October 31, you’re going to see a lot of banks wanting to pick up market share and pick up really good risk profiles, because it helps their averages out.”

Sims therefore advises clients to use this competitiveness to their advantage. “I’m telling clients to call their bank and say, ‘I’m working with a broker, I’m actively shopping, give me the best possible deal you can; you get one opportunity,’” he says.

The best options for borrowers right now

With the market shifting every few weeks and little clarity on its longer-term direction, experts advise borrowers to base decisions on their own risk profiles.

“I prefer the variable, and the only reason is because I have a free option to lock in at any point in time should I want to do that,” Sims says. “If I see that inflation is not letting down and I need to lock in, I can do that, but if I lock in now and rates plummet, I’m facing high [prepayment] penalties.”

The variable option, Sims adds, could offer more flexibility if Canadians face widespread job losses or economic stress in the coming years, challenges that may be tougher under a fixed mortgage.

However, Robert McLister, a mortgage strategist at MortgageLogic.news, cautions that only those prepared to monitor the markets closely and act quickly should consider a variable rate in today’s environment.

“Unless you’re bulletproof financially and need shorter-term penalty flexibility, go easy on variables,” he advises. “If you model out their performance using today’s rates and forward rate projections, their performance edge is limited for most people. Add in the real dangers of inflation and Ottawa’s fiscal mismanagement, and their appeal shrinks further.”

Instead, McLister recommends a fixed-rate mortgage of three or five years for most, or a hybrid option for those with a little bit more appetite for risk.

“Get a sufficiently long rate hold if you’re home shopping or refinancing,” he adds. “The point is: don’t bet the ranch on much more [interest rate] relief from here.”

Written by Jared Lindzon

for Canadian Mortgage Trends

From tax implications to AML compliance, here’s what borrowers need to know before turning digital wealth into a mortgage.

Crypto mortgages are becoming a hot topic in Canada, but there’s still a lot of confusion around how they work. For Canadians with significant holdings in Bitcoin, Ethereum, or other digital assets, the idea of using that wealth toward homeownership is appealing. However, turning crypto into a viable down payment, or leveraging it as collateral, isn’t as simple as it sounds. Between tax implications, lender skepticism, and regulatory requirements, the path from digital wallet to mortgage approval requires careful planning and documentation.

Case studies: when crypto becomes a mortgage down payment

1) Recently, Brian Hogben of Mission 35 Mortgages worked with a client who had already converted cryptocurrency into Canadian dollars. The funds had been sitting in a bank account for over 90 days, typically enough to meet lender documentation standards.

The challenge was finding a lender, and more importantly, an underwriter, who understood crypto. Several major banks refused to proceed, despite the funds being seasoned and in fiat. Progress finally came through Bank of Montreal, which Brian explained has a specialized underwriting team familiar with crypto-related transactions.

After tracing the fund origins and confirming they were compliant with anti-money laundering (AML) standards, BMO approved the mortgage. It was a breakthrough, but it also highlighted how new and misunderstood crypto remains in the mortgage space.

2) A few years ago we ran into the exact same thing with clients purchasing a home in the Greater Toronto Area. They found us only one week before their closing date as their bank had withdrawn their mortgage approval. The reason was because the down payment was largely coming from digital wallets containing their crypto funds.

The only available solution was a private first mortgage, which we placed with Vault Mortgages. Everything went well, in spite of the tight timeline, and the buyers avoided losing their $250,000 deposit.

Interestingly, when they wanted to refinance within six months, they ran into the exact same problem. The banks still wanted to verify their down payment for the original purchase.

What is a crypto mortgage and how does it work?

Crypto mortgages typically fall into one of two categories:

• Crypto-funded mortgage: You sell your crypto, convert it to Canadian dollars, and use those funds as your down payment. This is more common but comes with tax consequences.
• Crypto-backed mortgage: You pledge your crypto as collateral without selling it. This may help you avoid triggering capital gains tax, but requires a lender capable of assessing and managing that risk.

How crypto-collateralized loans work

If you want to access liquidity without selling your crypto, a crypto-backed loan is another option. Here’s how it works:

1. Deposit crypto as collateral

You transfer your crypto to a platform, where it is held in a secure wallet or smart contract. Platforms such as YouHodler and Ledn support this model.

2. Loan-to-value (LTV) ratio

You can typically borrow between 30% and 70% of your crypto’s value. For example, pledging $10,000 worth of Bitcoin may get you a $5,000 loan.

3. Disbursement

Loans are issued in fiat (e.g., CAD, USD) or stablecoins. Most do not require a credit check and can be approved quickly.

4. Repayment and interest

Terms vary. Some platforms offer flexible repayment options; others require fixed schedules. Once the loan and interest are repaid, your crypto is returned.

5. Liquidation risk

If the value of your crypto drops and your LTV exceeds a certain threshold, you may be required to add collateral. Otherwise, your crypto may be liquidated.

6. No taxable event

Since you are borrowing, not selling, there is no capital gains tax event. This can be beneficial from a tax-planning perspective.

A simpler, safer alternative: using crypto ETFs for mortgage planning

For a more straightforward path, consider using crypto ETFs instead of direct crypto holdings. ETFs allow you to gain exposure to digital assets without managing wallets, keys, or exchange accounts.

Held through mainstream brokerages, including in TFSAs and RRSPs, crypto ETFs are easier for lenders to understand and verify, avoiding the friction that often comes with direct crypto assets.

Leading crypto ETFs in Canada

These are some of the top crypto ETFs available to Canadian investors:

• BTCC (Purpose Bitcoin ETF): The first Canadian Bitcoin ETF, with CAD and USD options and a carbon-neutral version
• BTCQ (3iQ CoinShares Bitcoin ETF): Physically-backed BTC, held in cold storage
• FBTC (Fidelity Advantage Bitcoin ETF): Designed for registered accounts
• ETHH and ETHX (Purpose and CI Galaxy Ethereum ETFs): Offer direct ETH exposure, with or without staking
• IBIT (iShares Bitcoin ETF): Managed by BlackRock, a major global asset manager

Several ETFs now include additional exposure to AI stocks or newer crypto assets like Solana, expanding diversification options within this space.

Naturally, our readers should NOT assume this to be investment advice. Ask your licensed financial adviser for their opinion before proceeding please.

Can I use crypto as a down payment?

Yes, but there are strict conditions:

• You must convert the crypto to Canadian dollars
• Maintain a documented paper trail of the sale and deposit
• Be prepared to explain the origin of your funds for AML compliance

Many lenders will still be hesitant. Working with a mortgage professional familiar with these requirements and a lender that understands crypto is essential.

Is it legal and safe in Canada?

Yes, but regulatory guidance is evolving. Lenders must comply with OSFI and FINTRAC standards, which include thorough AML and source-of-funds verification.

OSFI is expected to implement new digital asset rules in 2025, which may influence how Canadian financial institutions handle crypto-collateralized products.

Key risks to consider

• Price volatility: A drop in crypto value can lead to margin calls or liquidation
• Lender restrictions: Many banks still reject crypto-related funds
• Platform risk: Some crypto lenders have gone bankrupt
• No deposit insurance: Crypto held as collateral is not insured by CDIC
• Compliance complexity: Documentation, tax reporting, and regulatory scrutiny can be significant

Who offers crypto-backed loans?

The following platforms offer crypto-backed lending services:

• Ledn (Canada-based)
• APX Lending (Canada-focused)
• Binance
• Coinbase
• Crypto.com
• YouHodler
• SALT Lending
• Aave and Compound (DeFi protocols)

For Canadians, I am told Ledn and APX Lending provide the most relevant regulatory alignment.

How does CRA treat crypto in mortgage scenarios?

Under CRA guidelines, cryptocurrency is treated as a commodity. Selling it to fund a down payment is a taxable event, and any capital gains must be reported.

However, borrowing against your crypto is not a disposition and does not trigger capital gains taxes, at least under current rules. Regardless, thorough documentation is critical.

Our advice

Crypto-backed mortgages and crypto-collateralized loans offer new possibilities, but they’re not ideal for everyone. If you’re a crypto holder considering homeownership in Canada:

• Convert your crypto to Canadian dollars early, and let it season for at least 90 days
• Alternatively, accumulate your crypto wealth in Exchange Traded Funds
• Document everything: sales, transfers, deposits, and sources of funds
• Work with professionals who understand both traditional lending and crypto
• Be ready to meet rigorous compliance and verification requirements

Canada’s mortgage landscape is still catching up to the digital asset world. Planning ahead is key to avoiding delays or declined applications.

Written by Ross Taylor

Mortgage Strategies

Lenders have started raising fixed mortgage rates again, with signs pointing to a short-term upward trend.

Fixed mortgage rates have been creeping upward over the past week, fuelled by a modest rebound in bond yields following stronger-than-expected economic data. The increases were partly driven by rising U.S. Treasury yields, with the 5-year rising above 4% following stronger-than-expected inflation data. That, in turn, helped lift Canadian bond yields, which are closely linked to their U.S. counterparts.

On this side of the border, Canada’s strong June employment report added to the momentum. Since fixed mortgage rates are closely tied to government bond yields, the upward pressure was enough to prompt some lenders to raise pricing, particularly on 3- and 5-year terms.

Rate hikes of around five to 10 basis points (0.05 to 0.10 percentage points) were seen by some lenders over the past week, with further increases continuing into this week.

While the changes varied by lender, they reflect what some observers see as a short-term trend toward higher fixed rates.

“Some lenders responded by increasing their fixed mortgage rates on Friday and I expect others to follow,” wrote mortgage broker Dave Larock. “Those increases are consistent with my recent assessment that bond yields, and the fixed mortgage rates that are priced on them, now have an upward bias.”

Ron Butler of Butler Mortgage said the upward move in longer-term yields is also being shaped by broader fiscal pressures. “The spectre of growing government deficits all over the world is creating capacity concerns,” he told Canadian Mortgage Trends.

He added that 3- to 5-year fixed mortgage rates—currently in the 4% range—will likely stay around these levels for the next few months.

Inflation data firm expectations for BoC hold

Larock noted that while June’s jobs data may not significantly affect the Bank of Canada’s rate outlook, the June inflation results released Tuesday will. Statistics Canada reported that the country’s annual inflation rate ticked up to 1.9% in June, with core inflation measures remaining stubborn.

That firmed expectations the Bank of Canada will hold its key rate on July 30, which would mean no change for existing variable-rate and HELOC borrowers.

“The central bank will almost certainly hold this month,” Butler said, though he still sees the potential for a cut later in the year. “No cuts from the BoC in July or September seem likely, but I expect one in October or December as the economy worsens.”

Many fixed terms still closely priced

Despite the recent hikes, Larock pointed out that fixed rates remain below their long-term averages. Term premiums, which are typically the extra cost of locking in for longer, are starting to return, but many popular fixed terms are still priced similarly.

In cases where 3- and 5-year terms are comparable, Larock said he continues to favour the 5-year fixed.

He added that variable rates are likely to deliver the lowest overall borrowing cost over time, assuming rate cuts materialize as expected. But he cautions that variable-rate borrowers need to be prepared for continued volatility and higher payments if the timing of those cuts shifts further out.

“Anyone choosing a variable rate should do so only if they can live with its inherent potential for volatility and if they have the financial capacity to withstand higher costs (and, in some cases, higher payments) should my forecast prove incorrect,” he wrote.

Written by Steven Huebl, Canadian Mortgage Trends

Retiring with mortgage debt is no longer the exception—it’s quickly becoming the norm as rising housing costs and later-life borrowing reshape retirement in Canada.

According to a 2024 Royal LePage survey, 30% of Canadians planning to retire in the next two years expect to carry mortgage debt into retirement, up from just 14% in 2016. That’s a dramatic shift in less than a decade, and a strong signal that Canada’s retirement landscape is changing.

So what’s behind this trend, and should you be concerned if you’re heading into retirement with a mortgage?

Why are more Canadians retiring with mortgage debt?

A combination of rising home values, later-life borrowing, and changing retirement expectations is reshaping what retirement looks like in Canada. Based on the Royal LePage study and what we see daily with our clients, here are the big drivers:

Homeownership is more expensive than ever

Canadian home prices have climbed significantly over the past 20 years. Many pre-retirees simply haven’t had enough runway to fully pay off their mortgages, especially if they bought later in life or refinanced during the low-rate era.

Many Canadians are helping their kids

Royal LePage found that 48% of Canadians aged 55+ who have children say they’ve helped them financially, often with a down payment. Some took out home equity loans or refinanced to do so, meaning they’re now carrying that debt into retirement.

Retirement timelines are shifting

Nearly one-third of soon-to-be retirees said they would consider delaying retirement specifically to manage their mortgage. Others plan to carry the debt and budget accordingly, signalling a growing comfort with retiring while still in repayment mode.

People are tapping into home equity

Whether it’s funding a renovation, covering lifestyle expenses, or providing intergenerational support, many Canadians are using HELOCs, cash-out refinances, or even reverse mortgages, tools that often leave a balance on the books into retirement.

Is it bad to retire with a mortgage?

Not inherently. Like most financial questions, the answer depends on context, your income, assets, goals, and whether you have a plan.

When it might make sense:

• Your retirement income easily supports the payments
• You’re using the mortgage strategically, such as helping family or maintaining liquidity
• You have sufficient home equity and diversified retirement assets
• You have a clear repayment or debt-reduction strategy

When it’s risky:

• Mortgage payments strain your fixed income
• You’re dipping into RRSPs or credit lines to stay afloat
• There’s no end plan for the debt
• You’re vulnerable to interest rate increases or surprise expenses

What are smart mortgage strategies for retirees

If you’re approaching retirement with a mortgage, or already in it, there are options to keep the debt manageable and aligned with your lifestyle.

1. Downsize to reset your financial picture

Selling a large or high-maintenance home can wipe out your mortgage and free up capital. It’s one of the most effective ways to improve cash flow while keeping your equity working for you.

2. Consider a reverse mortgage

A reverse mortgage can offer access to equity without monthly payments, making it easier to stay in your home comfortably. It’s not for everyone, but in the right case, it offers real peace of mind.

3. Refinance before you retire

If you’re still working, you may qualify for better terms or a longer amortization, lowering monthly payments and giving you flexibility as you transition into retirement.

4. Talk to a mortgage professional

Don’t go it alone. A mortgage broker who understands both retirement income planning and lending criteria can help structure a solution that protects your lifestyle, and your long-term plans.

The new retirement reality in Canada

The Royal LePage study makes one thing crystal clear: the days of entering retirement mortgage-free are fading fast. For today’s retirees and those coming up behind them, the new norm involves carrying some level of debt, and being thoughtful about how to manage it.

So ask yourself:

• Can your pension or retirement income safely cover your mortgage?
• Are you holding a manageable amount of debt, or is it limiting your financial flexibility?
• Have you stress-tested your retirement plan for future rate changes or cash flow shifts?

Retiring with a mortgage isn’t ideal, but it’s also not a dealbreaker. The key is to go in with eyes wide open, and a plan that works for your life.

Written by

Ross Taylor

Mortgage Strategies

July 18, 2025

Fixed mortgage rates creep higher as bond yields rise

Lenders have started raising fixed mortgage rates again, with signs pointing to a short-term upward trend.

Fixed mortgage rates have been creeping upward over the past week, fuelled by a modest rebound in bond yields following stronger-than-expected economic data.

The increases were partly driven by rising U.S. Treasury yields, with the 5-year rising above 4% following stronger-than-expected inflation data. That, in turn, helped lift Canadian bond yields, which are closely linked to their U.S. counterparts.

On this side of the border, Canada’s strong June employment report added to the momentum. Since fixed mortgage rates are closely tied to government bond yields, the upward pressure was enough to prompt some lenders to raise pricing, particularly on 3- and 5-year terms.

Rate hikes of around five to 10 basis points (0.05 to 0.10 percentage points) were seen by some lenders over the past week, with further increases continuing into this week.

While the changes varied by lender, they reflect what some observers see as a short-term trend toward higher fixed rates.

“Some lenders responded by increasing their fixed mortgage rates on Friday and I expect others to follow,” wrote mortgage broker Dave Larock. “Those increases are consistent with my recent assessment that bond yields, and the fixed mortgage rates that are priced on them, now have an upward bias.”

Ron Butler of Butler Mortgage said the upward move in longer-term yields is also being shaped by broader fiscal pressures. “The spectre of growing government deficits all over the world is creating capacity concerns,” he told Canadian Mortgage Trends.

He added that 3- to 5-year fixed mortgage rates—currently in the 4% range—will likely stay around these levels for the next few months.

Inflation data firm expectations for BoC hold

Larock noted that while June’s jobs data may not significantly affect the Bank of Canada’s rate outlook, the June inflation results released Tuesday will. Statistics Canada reported that the country’s annual inflation rate ticked up to 1.9% in June, with core inflation measures remaining stubborn.

That firmed expectations the Bank of Canada will hold its key rate on July 30, which would mean no change for existing variable-rate and HELOC borrowers.

“The central bank will almost certainly hold this month,” Butler said, though he still sees the potential for a cut later in the year. “No cuts from the BoC in July or September seem likely, but I expect one in October or December as the economy worsens.”

Many fixed terms still closely priced

Despite the recent hikes, Larock pointed out that fixed rates remain below their long-term averages. Term premiums, which are typically the extra cost of locking in for longer, are starting to return, but many popular fixed terms are still priced similarly.

In cases where 3- and 5-year terms are comparable, Larock said he continues to favour the 5-year fixed.

He added that variable rates are likely to deliver the lowest overall borrowing cost over time, assuming rate cuts materialize as expected. But he cautions that variable-rate borrowers need to be prepared for continued volatility and higher payments if the timing of those cuts shifts further out.

“Anyone choosing a variable rate should do so only if they can live with its inherent potential for volatility and if they have the financial capacity to withstand higher costs (and, in some cases, higher payments) should my forecast prove incorrect,” he wrote.

Written by Steve Huebl, Canadian Mortgage Trends

Update from Dr. Sherry Cooper:

There is every indication that the housing markets in the GTA and the GVA are beginning to perk up following a disappointing Spring market. Sales generally increased in May and June, and new listings fell last month. The price data suggest a flattening in prices. Tariff uncertainty has swamped the psychology of many potential buyers, who are reticent to make a move. The latest 35% tariff threat from Washington doesn’t help.

And while the central bank was expected to lower interest rates further, it took a pass at the prior two meetings and is likely to do so again on July 30th when it meets. This morning’s CPI release for June showed a continued rise in core inflation, effectively ruling out a BoC rate cut.

Moreover, longer-term interest rates are market-driven and have been trending higher since March, when tariff sabre-rattling began in earnest. Canada’s five-year government bond yield broke above its key 3% support level in the past week. This could well trigger another rise in fixed mortgage rates. Furthermore, the Canadian two-year yield is 2.83%, which is above the Bank’s overnight policy rate of 2.75%. This suggests that monetary easing in Canada may be over for this cycle, provided the economy remains resilient. Of course, given the TACO issue (an acronym that stands for Trump Always Chickens Out), any forecast bears more than the usual uncertainty.

Written by Dr. Sherry Cooper