It became harder to buy a home in most Canadian markets in February
February 2026 Ratehub.ca Home Affordability Report
Demand for Canadian real estate remains frosty compared to recent years, but the most recent price data shows some regional markets are starting to firm up as the early spring market approaches.
The latest affordability analysis from Ratehub.ca shows that out of the 13 major markets studied, 11 of them saw buying conditions tighten up between January and February. The report defines affordability as the amount of income a home buyer would need to earn to qualify for a mortgage on the average-priced home in their city.
The findings are based on national real estate data, as well as how changes to mortgage rates and the stress test rate impact overall borrower qualification. It also includes how the average monthly mortgage payment changes for new borrowers on a monthly basis.
Mortgage rates largely flat in February
In February, the affordability decrease in most markets was due to slightly higher home prices than in January; mortgage rates were largely unchanged as there was no Bank of Canada rate announcement to impact variable mortgage rates. Fixed mortgage rates were also stable for the majority of the month – while bond yields have since increased sharply following the announcement of war in Iran on the 28th, this wasn’t captured in the February data set.
The average five-year fixed mortgage and stress test rates used in the study were 4.41% and 6.41%, respectively – both just one basis point higher than the rates used in the January analysis.
Meanwhile, on a month-over-month basis, a number of markets saw benchmark prices rise slightly. This led to an uptick in both the required income and monthly mortgage payment in those cities.
Let’s take a look at how this has played out across Canada:
February 2026: 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 February 2026 and January 2026. Average home prices are from the CREA MLS® Home Price Index (HPI).
According to the data, Montreal saw the most significant increase with $2,800 in additional income required to purchase the average home. The city saw the biggest change in home price at $14,300 more month-over-month, to a benchmark of $594,200. This reflects increased stabilization within the Montreal market in recent months. As reported by the Quebec Professional Association of Real Estate Brokers, while sales remain slow, the amount of time it takes to sell single-family homes shortened in February, and remains below the historical average, giving sellers an advantage.
The Montreal borrower in this scenario would pay $76 dollars more on their monthly mortgage payment, or $912 per a year, in February compared to if they bought in January.
Halifax also saw a big change in affordability, with $2,650 in additional income required to purchase the average home. The Halifax borrower in this scenario would pay $71 dollars more on their monthly mortgage payment, or $852 per a year, in February compared to if they bought in January.
St. John's was the only city that saw reasonable improvement in home affordability, with $1,130 less income required to purchase the average home. This is due to the average home price decrease of $6,300. The St. John’s borrower in this scenario would pay $30 dollars less on their monthly mortgage payment, or $360 per a year, in February compared to if they bought in January.
What’s to come for Canadian real estate affordability?
While mortgage rates were largely unchanged in February, they’re likely to play a larger role in affordability trends in March. Fixed mortgage rates are poised to rise aggressively in the coming weeks, as bond yields have spiked in response to war-induced energy prices and fears that higher inflation could become the norm.
Both the US 10-year Treasury yield – which acts as the global benchmark for investor economic expectations – and the Government of Canada 5-year bond yield are considerably elevated, broaching the 4.4% and 3.2% ranges this week, respectively. That has put intense pressure on lenders, which use bond yields as the pricing floor for fixed mortgage rates, to hike their pricing. The best 5-year fixed rate on Ratehub.ca has increased this month, rising 20 basis points to 3.99% from the previous 3.79%. Should the conflict in Iran be prolonged, this will have an impact on mortgage pricing and affordability conditions across Canada.
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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.