Canada’s 2025 Federal Budget is 493 pages long. Ontario’s Fall Economic Statement adds another 220. That’s over 700 pages of government talk — and I actually read them.

Why? Because buried in all that fine print are the clues to what will happen to your mortgage, your renewal, and your buying power in 2026.

Most of the headlines focus on “record deficits.” But the real story is how those decisions shape the money you borrow and the home you live in.

1️⃣ The $78-Billion Deficit — and Why It Matters

Ottawa is spending big again — a $78-billion deficit (Budget 2025, p. 38).

That means the federal government will borrow a lot more money.

Here’s why you should care:

• When Ottawa borrows, it issues Government of Canada bonds.
• More bonds = more supply = higher bond yields.
• And bond yields are what your fixed mortgage rate is built on.

So even though inflation is cooling, the deficit keeps rates from dropping quickly.

Think of it like this: Ottawa borrows first — and we all pay the interest later.

2️⃣ Ottawa’s Forecast — Slow and Steady

In Annex 1 (Budget p. 412), the government expects five-year bond yields to average 3.3 % in 2026, just below 2025’s 3.5 %.

That points to five-year fixed mortgage rates around 4.8–5.1 %.

Translation: no crash, no spike — just stability.

And that’s actually a good thing.

It gives you time to plan, not panic.

3️⃣ The Bank of Canada and the U.S. Fed — The Slow Dance

• Bank of Canada rate: 2.25 %, on hold.
• U.S. Fed rate: 4.75 %, also holding.

Canada can’t cut rates too fast or the dollar could fall.

So, the most likely path? Small cuts in mid-to-late 2026.

Good news: no wild swings.

Bad news: no quick drop to pre-pandemic rates.

This is a time for smart planning, not wishful thinking.

4️⃣ Ontario’s Economic Update — A Real-World View

The 2025 Ontario Fall Economic Statement (A Plan to Protect Ontario) shows the province slowing but stable:

• GDP growth: 0.8 % (2025) → 0.9 % (2026)
• Deficit: $13.5 B (2025–26)
• Debt-to-GDP: stable
• 8 % HST removed for first-time buyers of new homes under $1 M
• Municipal Housing Infrastructure Fund: now $4 B
• Infrastructure plan: $201 B over 10 years

Ontario’s economy isn’t booming — but it’s holding up.

Jobs remain solid, people keep moving here, and housing demand stays healthy.

5️⃣ Housing and Affordability — Governments Still Spending

The Federal National Housing Accelerator Fund got a $7 B boost. Ontario added $4 B to help towns build faster. Plus, the new HST rebate saves first-time buyers up to $80 000.

That means the housing market will stay active, not collapse.

More support equals more confidence.

6️⃣ Your 2026 Mortgage Game Plan

7️⃣ Quick Forecast Snapshot

• 5-year bond yield ≈ 3.3 % (2026)
• Variable rates down 0.25–0.5 % by late 2026
• Ontario GDP +0.9 % (2026 projected)
• Housing starts +2–3 % (under population growth)

Bottom line → Gradual relief and balanced markets.

8️⃣ Three Smart Moves Right Now

1. Check your renewal date. You can lock 120 days out.
2. Run two rate scenarios. Flat vs -0.25 % — see the impact.
3. Stay flexible. Shorter terms or blend-to-extend options keep you nimble.

9️⃣ The Takeaway

Two budgets. 700 pages. One message: stability is your friend.

Plan ahead while others wait for a miracle rate drop.

This is your window to get ahead of 2026.

📞 Let’s chat about how these numbers fit your mortgage plan.

Stuart....

Stuart Lessels

Your “Go To” Mortgage Broker for Georgian Bay and Beyond

📧 stuart@housenow.ca 📞 (705) 445-1234

FSRA #12487 | Mortgage Alliance — Enrich Mortgage Group Ontario

Oct 29, 2025 - The Bank of Canada announced a quarter-point cut to its overnight rate, bringing it down to 2.25% — the lowest level since early 2023.

The headline was predictable; the message behind it was not.

Governor Tiff Macklem’s statement today signals that the Bank believes we’re near the end of the easing cycle and entering a period of assessment — a pause to see whether the economy can stabilize without slipping into a deeper slowdown.

1️⃣ Why the Bank Cut

The Bank of Canada’s press release and Monetary Policy Report paint a clear picture of an economy that’s sluggish, fragile, and uneven:

• Inflation: Headline CPI has slowed to around 2.4%, but core measures — the Bank’s preferred gauge — remain around 3%, suggesting price pressures are lingering in services and shelter costs.
• Growth: The Bank slashed its forecast for 2025 to ~1.2% GDP growth, and for 2026 to ~1.1%, down sharply from previous projections.
• Trade headwinds: Weak exports and soft business investment — exacerbated by U.S. tariff uncertainty — are weighing on manufacturing and confidence.
• Labour market: Job growth has stalled. The national unemployment rate has crept to 6.8%, and Ontario sits closer to 7.9%, with fewer job openings and rising part-time work.
• Household stress: Mortgage arrears and insolvencies are edging up, particularly among households that locked in ultra-low rates in 2020–2021 and are now renewing above 5%.

In short: the economy needed air. This cut was the oxygen.

2️⃣ Why They Might Stop Here

Despite the cut, the Bank is signalling a pause.

“If inflation and economic activity evolve broadly in line with our projections, the current policy rate is about the right level.” – Bank of Canada, Oct 29 2025

Translation: Unless something breaks, this could be the bottom.

The Bank doesn’t want to risk over-stimulating the housing market just as it’s starting to rebalance, nor does it want to undo the hard-won progress on inflation.

Expect rates to hold for several months — possibly well into spring 2026 — as the Bank monitors how households and markets adjust.

3️⃣ Bond Market Reaction — The Real Driver of Mortgage Rates

The 5-year Government of Canada bond yield dropped to ~2.55% within minutes of the announcement.

Why does that matter?

Because fixed mortgage rates follow bond yields, not the overnight rate directly.

As bond yields decline, expect lenders to shave their fixed-rate offers in the coming days — though spreads may remain wide as banks manage funding costs and risk.

For variable-rate borrowers, the cut translates to a 25-basis-point drop in prime, bringing most banks’ prime to 4.45%.

That means someone with a $500,000 variable mortgage could see payments drop roughly $70–$90 a month, depending on amortization.

4️⃣ What This Means for Ontario Homeowners and Buyers

Ontario’s housing market is still cool by pandemic standards, but the trendlines are shifting.

• Average benchmark home prices across the province have inched down 2–3% since spring, but new listings are up and inventory has stabilized around 4 months — a balanced market.
• Toronto and Ottawa remain soft but show pockets of stability. Simcoe and Georgian Bay markets are benefiting from local migration and sustained demand for recreation and retirement homes.
• Unemployment and slower wage growth could cap upside momentum — which is good news for first-time buyers still priced out by tight supply.

In short: this cut may help reignite confidence without reigniting speculation — a healthy middle ground.

5️⃣ Strategy for Borrowers and Investors

✅ Renewals: If your mortgage is coming due in 2025 or 2026, you’re finally catching a break. Fixed rates could ease toward the mid-4s if bond yields stay lower.

✅ Variable borrowers: Enjoy the relief, but don’t get complacent. A pause is not a pivot to aggressive cuts — the Bank is still worried about sticky inflation.

✅ Investors: Lower borrowing costs plus softer prices make this an interesting window to refinance and acquire — especially if you can lock in equity today and ride the next growth cycle.

✅ HELOC and refi clients: With prime down 25 bps, HELOC interest eases slightly — but if you’re carrying revolving debt, consider rolling it into a fixed-term product to control cash flow.

6️⃣ The Smart Move Now

Think of today’s cut not as the green light to splurge, but as a yellow light — a signal to position strategically.

📉 If rates stay low longer → you gain payment relief and more buying power.

📈 If rates go back up → you want a mortgage plan that’s already future-proofed.

That’s where I come in. We’ll review your renewal window, debt structure, and market timing so you benefit from the cut — without betting on it.

7️⃣ What Comes Next

The Bank of Canada will now watch to see if this cut stimulates enough activity to steady the economy without re-igniting inflation.

The next announcement is set for December 10, 2025. Between now and then, expect bond markets to dictate where fixed rates go — and I’ll keep you updated on every basis point.

📊 Quick Snapshot: Impact of the Cut

Bottom Line

This cut matters — but its significance is strategic, not symbolic.

It’s not about how low rates go; it’s about how you use this moment to reshape your financial position.

Now is the time to review, refine, and reset your mortgage strategy for 2026 and beyond.

Stuart Lessels

Your “Go-To” Mortgage Broker for Georgian Bay and Beyond

📧stuart@housenow.ca 📞 (705) 445-1234

It’s Halloween season — but not every horror story happens in a haunted house.

For many Canadians, the real fright hides in their mortgage.

Each year, homeowners are tricked by hidden penalties, teaser rates that vanish, or lenders who ghost them after closing.

But one monster is worse than them all — the Worst of the Worst — the Zombie Renewal — the mortgage that won’t die, quietly draining thousands from Canadians every year.

Let’s unmask the mortgage monsters haunting today’s market — and show you how to stay safe.

💀 The Early-Payout Poltergeist

Breaking a mortgage early can trigger penalties of $10 000 – $20 000 or more.

✅ Fix: We calculate your penalty risk before you sign so you’ll never face a mid-night fright from your lender.

🧛 The Variable-Rate Vampire

Variable rates look charming — until they bite.

In October 2025, Ontario’s average variable rate is ≈ 6.35 %, and five-year fixed ≈ 5.64 %.

✅ Fix: We stress-test every deal so rising rates can’t bleed your budget dry.

👻 The Ghost Lender

Some lenders vanish after funding, leaving clients in the dark.

✅ Fix: We work only with transparent, reliable partners — no disappearing acts.

🧟 The Zombie Renewal — the Worst of the Worst

Nearly 60 % of Canadians auto-renew without comparing rates (CMT 2025).

That’s the Zombie Renewal — a deal that staggers forward year after year, feeding on your equity.

✅ Fix: We start renewal reviews 120 days early, comparing 60 + lenders so you keep your cash alive.

💡 Ontario Market Snapshot (October 2025)

Knowledge replaces fear — and planning kills panic.

🎯 Your Mortgage Rescue Plan

We’ll expose hidden fees, compare lenders, and build your personal rescue strategy.

📞 Book your Mortgage Rescue Session today — before your mortgage turns into a horror story.

Stuart Lessels

Your “Go-To” Mortgage Broker for Georgian Bay and Beyond

Mortgage Alliance Enrich Mortgage Group Ontario FSRA #12487

📧stuart@housenow.ca

📞 (705) 445-1234