Home affordability improved in 10 of 13 cities in October
October 2025 Ratehub Affordability Report
Canada’s autumn housing market can be described as tepid – while sales have steadily climbed from their March lows, they remain 4.3% below last year’s October activity. Home prices have also stayed relatively soft; even as the Canadian Real Estate Association reports buying competition is starting to firm up in some markets, the national home price benchmark lags last year’s level by 3%.
Translation for home buyers: It’s still cheaper to get into the housing market, with plenty of inventory to choose from. Combined with comparably lower mortgage rates, Canadian real estate affordability is still quite attractive.
That was reflected in the latest affordability study from Ratehub.ca; the monthly snapshot reveals affordability conditions improved in 10 of the 13 markets studied across the country. The report acts as a real-time tracker of affordability conditions and how they shift on a monthly basis, with a calculation based on real estate prices, changes to mortgage rates, and the mortgage stress test rate, as well as corresponding monthly mortgage payments.
Affordability is defined by the amount of income a home buyer would need to earn to qualify for a mortgage on the average-priced home in their city.
As mortgage rates were largely stagnant for the majority of October (rates decreased in the final days of the month following a Bank of Canada rate cut and drop in bond yields), it was lower home prices that effectively moved the needle in most cities. The average five-year fixed mortgage rate used in the study stayed unchanged from September at 4.47%, with a corresponding mortgage stress test of 6.47%.
October 2025: How much did you need to earn to buy a home in Canada?
This report is for illustration purposes only. Data is based on a mortgage with a 10% down payment, 25-year amortization, $4,000 annual property taxes and $150 monthly heating. Mortgage rates are the average of the Big Five Banks’ 5-year fixed rates in September and October 2025. Average home prices are from the CREA MLS® Home Price Index (HPI).
The city with the most improved affordability month over month is Vancouver, where the benchmark home prices dropped by $9,600 – though at $1,132,500, this remains firmly the most expensive housing market in Canada. Prices in the west coast city have dipped, as slowing sales have created buyers’ market conditions; accordion to the Greater Vancouver Realtors, October transactions are down 14.3% year over year.
As a result, the necessary income required to purchase a home in Vancouver dropped in kind by $1,800, and the monthly mortgage payment by $49.
Ranking second is Hamilton; once a hot real estate destination during the COVID years, demand has since cooled off in the Greater Golden Horseshoe city. Prices have been steadily declining in recent years, and on a monthly basis, fell $6,100 from September to $747,200. That’s resulted in the required income to qualify for a mortgage to drop by $1,150, and the corresponding mortgage payment to dip by $31.
Meanwhile, Fredericton saw the biggest increase with $1,440 in additional income required to purchase the average home. This is due to the average home price increase of $7,500. The Fredericton borrower in this scenario would pay $38 dollars more on their monthly mortgage payment, or $456 per a year.
Will homes get more affordable in Canada?
While home prices may take some time to reheat, buyers may not be able to count on ultra-low mortgage rates for the long term. In its last rate announcement on October 29, the Bank of Canada indicated the 25-basis-point rate cut passed on that day would likely be its last for the time being, citing stablizing inflation, and a more predictable global trade landscape. While reassuring that the Bank would be “prepared to respond” should the economy require more stimulus, its Governing Council stated in the rate decision announcement that, the current rate policy is “about the right level” to keep the economy on a straight path for the time being.
As a result, variable mortgage rates aren’t likely to fall further. Fixed mortgage rates, meanwhile, are facing upward pressure as bond yields have ticked higher. This is due to a number of factors including inflation data, the end of the US government closure, as well as likely rate holds from both the Canadian and American central banks.
Anyone currently shopping for a mortgage should take advantage of a rate hold and pre-approval as soon as possible, to guarantee access to the lowest rates available today – even if they should move higher in the months to come.
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Penelope Graham, Head of Content
Penelope has over a decade of experience covering real estate, mortgage, and personal finance topics and her commentary on the housing market is featured on both national and local media outlets.