Rates.ca data showed borrowers shifting from purchases to renewals and longer terms
The housing market’s slowdown in 2025 appeared to have pushed many Canadian borrowers into a defensive crouch, with fresh data from Rates.ca suggesting a marked pivot away from purchases and investment properties toward renewals and five-year terms.
According to the company’s mortgage quoter, purchase quotes as a share of total activity fell to 25% in November from 41% a year earlier, while renewal quotes jumped to 64% from 47%.
Investment property quotes dropped to just 2% of the total, from 9% the previous year. Variable-rate quotes rose to 29% from 16%, and five-year terms climbed to 81% of quotes as three-year terms slid to 19%.
“These numbers are a snapshot of what homebuyers are thinking about right now,” Victor Tran, mortgage and real estate expert at Rates.ca, said.
“Interest in investment properties is at rock-bottom, and an increasing number of homeowners are concerned about renewing into higher rates in 2026. Both homeowners up for renewal and those considering purchasing a home are looking at options that make the most of current market conditions, and variable rates have been of interest as the Bank of Canada continued with the easing cycle. We will likely see less interest in variable rates if the Bank of Canada holds the overnight rate steady and fixed rates continue to rise.”
This shift unfolded against a backdrop of falling sales and softer prices in key markets such as the Greater Toronto Area and Vancouver, where home sales and values declined over the past year.
At the same time, roughly 60% of Canadian mortgages are expected to renew in 2025 or 2026, with the central bank estimating that average payments could rise 6% for 2026 renewals compared with December 2024.
Borrowers shifted from buying to renewing
Tran said the recent fascination with shorter commitments has already begun to fade.
“Traditionally Canadians have favored five-year, fixed-rate mortgages, and the interest in variable rate mortgages and three-year term lengths likely came from those looking to purchase or renew that were concerned about locking into a higher mortgage rate if rates continued to fall. We are already seeing a reversal of interest in three-year term lengths and a return to favoring five-year term lengths, which suggests buyers and those renewing are anticipating rates beginning to rise in 2026.”
Variable-rate interest rose as BoC eased
The Bank of Canada’s benchmark rate has already fallen from 5.0% in mid-2024 to 2.25%, with the overnight rate declining by 2.75 percentage points over that period. That easing cycle lowered costs for variable-rate borrowers and helped explain the rise in variable quotes captured by Rates.ca.
Still, industry forecasts indicate that while some further relief remains possible, the path of rates beyond 2025 has grown less certain, leading many borrowers back toward longer-term fixed products as a hedge against renewed volatility.
Most borrowers still view fixed terms as the safer option as hopes for aggressive central-bank cuts faded.
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