February 18th, 2025 Mortgage Industry Update
The Bank of Canada announced on January 29th that its overnight rate to 3.00% from 3.25%! Marks the sixth consecutive rate cut from the bank. The economy is expected to strengthen gradually and inflation to stay close to target moving forward. The prime rate decreases to 5.20%.
Additionally this week:
– Canadian Bankers Association: Canadian mortgage borrowers are increasingly falling behind on their mortgage payments. The number of mortgages in arrears climbed 22% to 10,480 in November, the most held by CBA members since March 2021.
– Bank of Canada‘s latest quarterly Market Participants Survey: Most respondents expect the central bank to implement two more quarter-point rate cuts, bringing the policy rate to 2.50% by July. This is 25 basis points lower than the forecasts in the Q3 survey.
– Amount of residential mortgage debt held by non-bank lenders has surged. Statistics Canada reports a 19% jump in outstanding non-bank residential mortgages, growing from $338 billion in Q3 2020 to $401 billion in Q3 2024.
– CMHC: With tighter mortgage qualification rules and rising borrowing costs, up to half of homebuyers in Canada now rely on mortgage brokers. That’s an increase from 43% in 2023 to 48% in 2024, as more buyers seek financing options beyond the big banks.
– Urbanation: Ontario experienced the largest decrease in rental prices in January. Rents fell 5.2% yearly to $2,329, a sharp decline from $2,632 in December. Represents a $300 drop in just one month. Toronto rents down 7.6% yearly to $2,615, marking a 30-month low.
– Urbanation: Rents in Canada continue to decline, marking the fourth straight month of decreases and the lowest national average in 18 months. While national average rent dipped only slightly from $2,109 in December to $2,100 in January, it marked a 4.4% annual decline.
Stay tuned for the next update!
For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.
