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What factors affect Toronto Mortgage and the Canadian Housing Market


A number of factors can affect Toronto mortgage and the city’s housing market. They have the capability of changing the face of the Canadian housing market and can be overwhelming for those who do not know how they work.  If you have ever had to suffer the brunt of changing mortgage rates its best that you know what these factors are and how they evolve –

Interest Rates

Interest rates are one of the largest factors that determine the state of the Toronto housing market and it is easy to see why. Once the interest rates change so will the lending rates from the Bank of Canada. The changed rates are what banks and lenders ultimately use to determine the interest rates for their own mortgages, home loans, refinancing and second mortgages.

A lender can lend a Toronto mortgage at a much lower rate if the overnight lending rate is low. This in turn creates more consumer demand.

When you consider how the Canadian housing market has fared in the past you can see how there was a boom in demand as soon as interest rates were lowered. This happened during the Great Recession when the Canadian Government took monetary action in order to support the housing market and boost demand. The Canadian Housing market was at an all time low when the interest rates were at their highest during the early 80’s.

The interest rates concerning Toronto mortgage are currently low while government regulations have been put into place that will keep the rates and demand at tolerable levels.


As discussed Toronto mortgage demands are usually at their highest when interest rates are low. This is understandable since consumers will want to take advantage of the lower rates. The rate of demand can also be affected by other factors like the preferences of various demographics. For example it is predicted that Canada’s baby boomer population will stay longer in homes while their younger counterparts are set to fuel the market. 

Migrant Population

Over 75,000 immigrants migrate to Canada on a yearly basis. Therefore it isn’t surprising how they are one of the housing market’s strongest supporters.

In the end it is clear that certain factors that determine Toronto mortgage rates and the Canadian housing market will be beyond a consumer’s control. Everything from consumer debt and MLS prices to global economic conditions can have affects on the housing market. The factors are favorable if they cause interest rates to drop and demand to rise. This bodes well for sellers as well since it allows them some say in what they will accept for the homes. In fact many analysts are of the opinion that Toronto mortgage rates are expected to drop from 10 to 15 percent during the next two to three years. Once consumers figure out how the Canadian Housing market works and what factors can affect it they will have an easier time predicting when interest rates will drop.

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