20 Jan

Canada Inflation Rises to 2.4%: What It Means for Mortgage Rates, Buyers, and Homeowners

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Posted by: Ash Khan

Canada’s inflation rate ticked up to 2.4%, surprising many economists and raising fresh questions about the direction of interest rates and mortgage planning in 2026. While the headline number moved higher, the underlying story is more nuanced—and important for anyone buying, refinancing, or holding property.

Let’s break down what’s actually happening and how it impacts real estate and mortgage decisions.

Why Inflation Increased in December

The rise in inflation was largely driven by base effects, not a sudden surge in ongoing price pressure.

In late 2024, the federal government introduced a temporary tax holiday on several consumer goods, including restaurant meals, toys, and some beverages. As those exemptions rolled off in December, year-over-year price comparisons naturally jumped higher.

This pushed headline inflation above expectations, even though some key cost pressures actually eased.

Core Inflation Is Cooling — And That Matters More

While the headline inflation rate rose, core inflation measures softened:

  • Bank of Canada trim and median inflation slowed to 2.6%, down from 2.9%

  • On a three-month annualized basis, core inflation dropped to 1.7%

  • Monthly CPI actually fell 0.2%, signaling cooling momentum

For the Bank of Canada, core inflation trends matter more than one-time base effects. This suggests inflation pressures are not re-accelerating in a sustained way.

What This Means for Interest Rates

This inflation report does not automatically mean rate hikes are coming, but it does complicate the timing of future cuts.

Key takeaways:

  • Rate cuts may be delayed, not cancelled

  • Bond markets could remain volatile in the short term

  • Fixed mortgage rates may stay elevated longer than expected

  • Variable-rate borrowers should plan conservatively for now

The Bank of Canada will likely remain cautious, waiting for consistent confirmation that inflation is sustainably under control.

Impact on Homebuyers and Homeowners

For buyers:

  • Affordability remains sensitive to rates, even with stable prices

  • Pre-approvals and rate holds are more important than ever

  • Buying decisions should focus on long-term payment comfort, not short-term inflation headlines

For homeowners:

  • Refinancing decisions require careful timing

  • Variable-rate holders should review trigger points

  • Strategic mortgage restructuring may help reduce risk in 2026

The Bigger Picture for 2026 Housing

Despite the inflation bump, broader trends still point toward:

  • Slower economic growth

  • Gradual easing in housing demand

  • More balanced market conditions

  • Greater importance of personalized mortgage strategy

Inflation headlines can be misleading without context. What matters most is how these numbers translate into policy decisions—and your monthly payments.

Final Thoughts

Inflation moving to 2.4% makes headlines, but the real story lies beneath the surface. Cooling core inflation and temporary base effects suggest the path forward is still cautious—but not alarming.

If you’re planning to buy, refinance, or reassess your mortgage in 2026, now is the time to review your options with a strategy built for changing conditions—not guesswork.

9 Jan

Toronto Housing Market Ends 2025 With Declines in Prices and Sales: What It Means for Buyers in 2026

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Posted by: Ash Khan

The Toronto housing market closed out 2025 on a softer note, with declines in both home prices and sales activity. After years of volatility, high interest rates, and economic uncertainty, buyer confidence remained muted through the end of the year, even as borrowing costs eased slightly and inventory improved.

So what does this actually mean if you’re buying, selling, or planning your next move in 2026? Let’s break it down.

A Slower Finish to 2025 for Toronto Real Estate
According to recent market data, Toronto home sales dipped again in December, while benchmark prices also edged lower. This capped off a year where buyer activity stayed cautious and many households delayed major financial decisions.

Key takeaways from the end of 2025:
Monthly home sales slipped slightly compared to November
* Benchmark home prices declined modestly month over month
* Annual sales were down significantly compared to 2024
* Prices finished the year lower overall, continuing a gradual downward trend
Despite lower interest rates compared to early 2024 and more listings available, buyers did not return to the market in large numbers.

Why Buyers Stayed on the Sidelines
The biggest factor holding buyers back wasn’t just mortgage rates — it was economic uncertainty.

Several pressures continued to weigh on confidence:
* Ongoing global and cross-border trade tensions
* Concerns about job stability and long-term income security
* Rising everyday living costs
* Hesitation to commit to large mortgages, even in a more affordable market
For many households, affordability improved on paper, but confidence didn’t fully return.

Inventory Is Rising — And That Matters in 2026
One important shift heading into 2026 is higher inventory levels. New listings increased toward the end of 2025, giving buyers more choice and more negotiating power.
This is a meaningful change from the ultra-competitive seller markets of previous years.

For buyers, this means:
* Less pressure to rush decisions
* More room to negotiate price and conditions
* Greater opportunity to align purchase timing with proper mortgage planning

For sellers, it means:
* Pricing strategy matters more than ever
* Overpriced homes are sitting longer
* Buyers are cautious and well-informed

What This Market Means for Buyers in 2026
If you’re thinking about buying in Toronto in 2026, this market may actually work in your favour — but only if you’re prepared.

Here’s what smart buyers are doing right now:
* Getting pre-approved before house hunting
* Stress-testing their budget against future rate changes
* Locking in flexible mortgage options
* Using improved inventory to negotiate confidently
This is no longer a market where guessing works. Planning first can save tens of thousands of dollars.

What Sellers Need to Understand Going Forward
For homeowners considering selling, 2026 will reward realistic pricing and strong preparation.

Buyers today:
* Are payment-focused, not just price-focused
* Compare multiple properties before making offers
* Expect value, not urgency
Working with the right real estate and mortgage strategy can help sellers position their homes correctly — and avoid extended time on market.

Confidence Will Drive the Next Move
One key insight from recent market commentary is this:
Home sales won’t meaningfully rebound until households feel confident about employment and income stability.
As economic conditions stabilize and confidence improves, buyer activity is expected to return — but not overnight.
This creates a window in early 2026 where prepared buyers may benefit the most.

Final Thoughts: Strategy Matters More Than Timing
The Toronto housing market ending 2025 with lower prices and sales doesn’t signal collapse — it signals transition.

For buyers:
* Opportunity exists, but only with proper mortgage planning

For sellers:
* Strategy and pricing are critical

For homeowners:
* Reviewing your mortgage options now could protect you from future rate changes

If you’re unsure how this market affects your specific situation, that’s where guidance matters most.

Thinking about buying, selling, or refinancing in 2026?
A quick mortgage check-in today can help you plan with clarity — not guesswork.

Written with insight by Ash Khan, Mortgage Broker.