Mortgage rates continue to tick higher, and the impact is being felt in housing markets across Canada, according to the latest affordability data from Ratehub.ca. The June edition of the study, which is conducted monthly to record affordability conditions in real time, found conditions eroded in 12 out of 13 major urban centres.
The report uses monthly real estate data from the Canadian Real Estate Association (CREA), average mortgage rates, and the mortgage stress test rate to calculate affordability levels in each market; this is defined as the amount of income a buyer would need to earn to qualify for a mortgage on the average-priced home in the city, as well as the corresponding monthly mortgage payment.
As was the case in May, steeper borrowing costs were to blame for tougher buying conditions. Higher bond yields have prompted lenders to push their fixed mortgage rate offerings higher, while variable mortgage rates have been stagnant. As a result, the average five-year fixed mortgage rate used in the study’s calculation increased to 4.48% in June compared to 4.38% in May. That in turn increased the mortgage stress test—a qualification step that requires borrowers to prove they could carry their mortgage at a rate 2% higher—to 6.48%.
Let’s explore how this impacted home purchasing power in markets across Canada in June.
Housing affordability across Canada’s major cities
The chart below shows how affordability evolved between May 2025 and June 2025, in Canada’s main housing markets, based on the income required to qualify for a mortgage. Income required is based on the stress test rates of 6.48% in both June, along with a mortgage rate of 4.48%.
June 2025: Home affordability report
Slide the columns right or left using your fingers or mouse to reveal more data.
| City | May average home prices | June average home prices | Change in home prices | May average mortgage payments | June average mortgage payments | Change in monthly mortgage payments | May income required | June income required | Change in income required |
|---|---|---|---|---|---|---|---|---|---|
| St. John’s | $378,300 | $387,800 | $9,500 | $1,919 | $1,988 | $69 | $86,450 | $88,910 | $2,460 |
| Fredericton | $334,700 | $342,200 | $7,500 | $1,698 | $1,754 | $56 | $78,200 | $80,200 | $2,000 |
| Ottawa | $629,800 | $634,300 | $4,500 | $3,196 | $3,251 | $55 | $134,020 | $135,960 | $1,940 |
| Victoria | $892,700 | $891,700 | -$1,000 | $4,530 | $4,570 | $40 | $183,750 | $185,100 | $1,350 |
| Vancouver | $1,177,100 | $1,173,100 | -$4,000 | $5,973 | $6,013 | $40 | $237,550 | $238,820 | $1,270 |
| Regina | $340,800 | $343,200 | $2,400 | $1,729 | $1,759 | $30 | $79,350 | $80,400 | $1,050 |
| Winnipeg | $387,800 | $389,800 | $2,000 | $1,968 | $1,998 | $30 | $88,250 | $89,300 | $1,050 |
| Halifax | $570,600 | $570,700 | $100 | $2,895 | $2,925 | $30 | $122,830 | $123,820 | $990 |
| Edmonton | $432,400 | $433,100 | $700 | $2,194 | $2,220 | $26 | $96,670 | $97,570 | $900 |
| Calgary | $583,000 | $580,100 | -$2,900 | $2,958 | $2,973 | $15 | $125,170 | $125,620 | $450 |
| Montreal | $580,100 | $576,800 | -$3,300 | $2,943 | $2,956 | $13 | $124,620 | $125,000 | $380 |
| Hamilton | $783,100 | $776,300 | -$6,800 | $3,973 | $3,979 | $6 | $163,020 | $163,100 | $80 |
| Toronto | $1,012,800 | $995,100 | -$17,700 | $5,139 | $5,100 | -$39 | $206,500 | $204,840 | -$1,660 |
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Canadian cities where affordability improved
Where in Canada is owning a home becoming more affordable?
Amid firming borrowing costs and early signs of recovering sales, just one housing market bucked the trends of worsening affordability.
Toronto: Sales uptick has yet to firm up prices
Toronto was the lone market to see an improvement in affordability, and this was largely due to a month-over-month decrease in the benchmark monthly home price; it declined by $17,700 from May, to $995,100. This was the result of flat buyer demand; according to the Toronto Regional Real Estate Board, a total of 6,243 homes sold over the course of the month, marking a 2.4% year-over-year decline, and virtually unchanged from May.
While the number of new listings brought to market decreased slightly—adding more competition to the marketplace—active GTA buyers are still spoiled for choice, as overall listings are 7.7% above last year’s levels.
In terms of affordability, this translates to the average buyer needing to earn $1,660 less than they would have in May, and the average monthly mortgage payment reduced by $39 to $5,100.
Canadian cities where affordability worsened
Twelve of the 13 cities included in the study saw conditions worsen; with the exception of outlier Toronto, it’s clear demand is returning for real estate, particularly in housing markets where prices are already comparably lower; buyers have been less derailed by steep interest rates in these regions, keeping the boil under buyer demand and competition.
St. John’s: Another month at the top
St. John’s posted another strong month for home sales, with activity coming in 1.9% higher than last year. Home prices continue to heat up, with the benchmark price for the city rising by 12.3%, and 12.5% for single-family detached homes, specifically. That works out to a monthly difference of $9,500, to $387,800.
That means a buyer in St. John’s would now need to earn $2,460 more in June, and that their monthly mortgage payment—if they took out a new mortgage that month—would rise by $69 to $1,988.
Fredericton: Hot seller conditions push up prices
While the City of Fredericton had a relatively quiet month in terms of real estate activity—year-over-year home sales were down 4.7%, and new listings rose by 9.3%—overall supply in the region remains tight, which has prevented prices from cooling. The sales-to-new-listings ratio (SNLR) for the region is a steep 69.8%, well within sellers’ market territory.
As a result, the benchmark home price rose by $7,500 month over month to $342,200; that means a buyer there will now need to earn $2,000 more to afford a property, and the monthly mortgage payment increased by $56 to $1,754.
Ottawa: Sales are bouncing back in the nation’s capitol
The Ottawa housing market had a busy June, with home sales rising 10.6% on a year-over-year basis, now sitting 3.8% above the five-year average. That effectively pushed the benchmark price higher by $4,500 month over month, to $634,300. That breaks down to a required income increase of $2,940 for an Ottawa-area home buyer, and a monthly mortgage payment increase of $55 to $3,251.
How much mortgage can you afford? How much house can you buy?
The Affordability report compiled by Ratehub.ca offers a monthly look at how home prices, mortgage rates, and overall affordability is changing across Canada. The study crunches the numbers based on home price data, as well as any changes to borrowing costs. You can determine your own affordability by checking out the MoneySense mortgage affordability calculator.
Will Canadian mortgage rates rise further in 2025?
It’s looking less likely that borrowers will see further rate relief this year. Fixed mortgage rates increased this week, as bond yields—which lenders use to price their fixed-rate term options—march steadily higher. On July 15th, the Government of Canada five-year bond yield (which generally underpins five-year fixed rates) rose to a six-month high of 3.13%, after hovering in the upper 2–3% range for weeks. That was enough of an increase for lenders to hike their rate offerings, with the lowest five-year fixed rate option in Canada now at 3.89%.
Bond yields have been high due to a combination of factors including stubborn inflation, and ingrained concerns over an evolving US trade war. Investors have become permanently wary of the volatility posed by ever-changing tariffs, and have been less inclined to park their cash in traditional US-backed “safe haven” investments such as the 10-year US treasury bond. As that bond acts as a global benchmark, it has also propped up the floor for its Canadian counterparts. Until material relief and certainty on trade is achieved between Canada and the US, it’s unlikely bonds will drop, paving the way for rising fixed rates.
Variable mortgage rates, meanwhile, are set to enter a longer-term holding pattern. The Bank of Canada, which influences lenders’ prime and variable rates via its trend-setting overnight lending rate, has chosen to hold its rate pat in its last two rate announcements, in June and April—and it’s looking all the more likely they’ll hold it again on July 30th. This is also due to sticky inflation. The latest June Consumer Price Index report showed an increase in both the headline and core measures—but also evidence that the economy is holding its own amid tariff scenarios. That means the central bank doesn’t need to add stimulus just yet—good news for the overall economy, but less so for mortgage rate shoppers who were hoping to see costs slide further.
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Read more about mortgage affordability:
- Where to buy real estate in Canada
- The complete guide for first-time home buyers in Canada
- Tools to calculate your mortgage payments and costs in Canada
- Mortgage refinance calculator
- Mortgage renewal calculator
This article was created by a MoneySense content partner.
This is an unpaid article that contains useful and relevant information. It was written by a content partner based on its expertise and edited by MoneySense.
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