Most big-city buyers saw a small break in November, but rate risks linger
Homebuyers in most major Canadian cities caught a rare break in November, as softer prices and slightly lower borrowing costs nudged affordability in the right direction for a second month.
According to Ratehub.ca’s latest affordability report, 12 of 13 major Canadian cities saw the income needed to purchase an average home fall in November 2025, with both required earnings and monthly payments easing for many buyers.
The study measured affordability using local benchmark prices, prevailing five‑year fixed mortgage rates and the mortgage stress test, based on a 10% down payment, 25‑year amortization, $4,000 in annual property taxes and $150 in monthly heating costs.
Hamilton, Calgary lead modest affordability gains
Penelope Graham, mortgage expert at Ratehub.ca, said the latest data showed another incremental improvement rather than a turning point.
“While mortgage rates decreased slightly month-over-month, it wasn’t by much so home prices continued to be the primary driving factor for the improvement,” Graham said.
Hamilton posted the sharpest move. “Hamilton saw the most improvement in affordability, with the average home price down $12,500 cutting the income needed to buy by $2,780,” she said.
“The Hamilton borrower in this scenario would pay $76 dollars less on their monthly mortgage payment, or $912 per a year, in November compared to if they bought in October.”
Calgary also saw meaningful relief as sales cooled and average prices slipped, reducing both the qualifying income and monthly payment required to purchase an average home.
Still, not every market improved. “Of the 13 cities studied, only one saw home affordability worsen,” Graham said. “Fredericton saw $330 in additional income required to purchase the average home. This is due to the average home price increase of $2,700. The Fredericton borrower in this scenario would pay $9 dollars more on their monthly mortgage payment, or $108 per a year, in November compared to if they bought in October.”
Lower rates helped – but headwinds remained
Affordability in November was helped by the Bank of Canada’s 25‑basis‑point cut on October 29 and slightly lower bond yields, which pulled the average five‑year fixed rate used in the study down to 4.44% from 4.47% and the stress test to 6.44% from 6.47%.
At the same time, shoppers who secured deep discounts away from the big banks gained a further edge.
“The best 5-year fixed rate on Ratehub.ca has increased recently to 3.94%. However, it still continues to be lower than the average of the Big Five, which is what we use in these calculations,” Graham said.
“Securing a lower rate, such as 3.94%, will have a big impact on how much you can qualify for. Looking at the average national home price of $682,912 that could mean a savings of $173 per month, or $2,076 per year.”
What it meant for 2026 planning
The Bank of Canada’s December 10 decision to hold its policy rate at 2.25% suggested variable mortgage rates are likely to stay near 3.45% in the near term, limiting any further rate‑driven boost to affordability. Graham warned that fixed borrowing costs could stay elevated as well.
“Recently fixed rates have moved up and there are a number of market factors that could keep bond yields – and fixed mortgage rates – elevated throughout the new year,” she said.
“It’s important to familiarize yourself with the current interest rate environment if you’re entering the home buying market or if you have a renewal coming up,” Graham said. “Consider getting a pre-approval to lock in today’s lowest rate for up to 120 days.”
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