Mortgage rates have risen again, and housing markets across Canada are feeling the impact, according to the latest affordability data from Ratehub.ca. The June edition of the monthly study found affordability worsened in 12 of 13 major urban centres as borrowing costs climbed.
The report combines monthly real estate statistics from the Canadian Real Estate Association (CREA) with prevailing mortgage rates and the mortgage stress test rate to measure affordability in each market. Affordability here is expressed as the income a buyer needs to qualify for a mortgage on the average-priced home in a given city, along with the resulting monthly mortgage payment.
Like in May, higher borrowing costs were the main driver of deteriorating affordability. Rising government bond yields pushed lenders to raise their fixed-rate mortgage offers, while variable rates remained relatively unchanged. As a result, the average five-year fixed mortgage rate used in the study rose to 4.48% in June, up from 4.38% in May. That pushed the mortgage stress test rate — the qualifying rate that requires borrowers to demonstrate they can handle payments at a rate 2% higher than their contracted rate — up to 6.48%.
Below is a summary of how these changes affected home purchasing power in Canadian markets during June.
Housing affordability across Canada’s major cities
The table that follows shows how affordability shifted from May 2025 to June 2025 across Canada’s primary urban markets. Figures are based on the stress test rate of 6.48% and an average five-year fixed mortgage rate of 4.48% for both months.
June 2025: Home affordability report
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| City | May average home prices | June average home prices | Change in home prices | May average mortgage payments | June average mortgage payments | Change in monthly mortgage payments | May income required | June income required | Change in income required |
|---|---|---|---|---|---|---|---|---|---|
| St. John’s | $378,300 | $387,800 | $9,500 | $1,919 | $1,988 | $69 | $86,450 | $88,910 | $2,460 |
| Fredericton | $334,700 | $342,200 | $7,500 | $1,698 | $1,754 | $56 | $78,200 | $80,200 | $2,000 |
| Ottawa | $629,800 | $634,300 | $4,500 | $3,196 | $3,251 | $55 | $134,020 | $135,960 | $1,940 |
| Victoria | $892,700 | $891,700 | -$1,000 | $4,530 | $4,570 | $40 | $183,750 | $185,100 | $1,350 |
| Vancouver | $1,177,100 | $1,173,100 | -$4,000 | $5,973 | $6,013 | $40 | $237,550 | $238,820 | $1,270 |
| Regina | $340,800 | $343,200 | $2,400 | $1,729 | $1,759 | $30 | $79,350 | $80,400 | $1,050 |
| Winnipeg | $387,800 | $389,800 | $2,000 | $1,968 | $1,998 | $30 | $88,250 | $89,300 | $1,050 |
| Halifax | $570,600 | $570,700 | $100 | $2,895 | $2,925 | $30 | $122,830 | $123,820 | $990 |
| Edmonton | $432,400 | $433,100 | $700 | $2,194 | $2,220 | $26 | $96,670 | $97,570 | $900 |
| Calgary | $583,000 | $580,100 | -$2,900 | $2,958 | $2,973 | $15 | $125,170 | $125,620 | $450 |
| Montreal | $580,100 | $576,800 | -$3,300 | $2,943 | $2,956 | $13 | $124,620 | $125,000 | $380 |
| Hamilton | $783,100 | $776,300 | -$6,800 | $3,973 | $3,979 | $6 | $163,020 | $163,100 | $80 |
| Toronto | $1,012,800 | $995,100 | -$17,700 | $5,139 | $5,100 | -$39 | $206,500 | $204,840 | -$1,660 |
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Canadian cities where affordability improved
Which markets are becoming more affordable? Despite broad pressure from higher borrowing costs, one major market saw an improvement in affordability in June.
Toronto: A modest improvement as prices ease
Toronto was the only market in the study to see affordability improve. The improvement stemmed from a drop in the benchmark price in June — down $17,700 from May to $995,100 — while sales remained essentially flat. According to the Toronto Regional Real Estate Board, roughly 6,243 homes traded hands in the month, a slight year-over-year decline and nearly unchanged from May.
With new listings softening slightly, buyers still face ample options: total listings in the Greater Toronto Area remain above last year’s levels. For affordability, the average buyer in Toronto needed to earn $1,660 less in June than in May, and the average monthly mortgage payment fell by $39 to $5,100.
Canadian cities where affordability worsened
Twelve of the 13 cities in the report experienced a decline in affordability. Outside Toronto, many markets saw renewed buyer interest, particularly in regions with lower price points where purchasers appear less deterred by higher interest rates. That increased demand translated into rising prices and higher required incomes to qualify for mortgages.
St. John’s: Strong sales keep prices climbing
St. John’s recorded another strong month of home sales, contributing to continued price gains. The benchmark increased by 12.3% year over year, with single-family detached homes rising 12.5%, translating to a $9,500 month-over-month increase to $387,800. As a result, prospective buyers in St. John’s needed to earn about $2,460 more in June, and the average monthly mortgage payment for a new mortgage rose by $69 to $1,988.
Fredericton: Tight supply keeps sellers in control
Despite a modest slowdown in sales year over year, Fredericton remains in seller’s market territory because overall supply is limited. New listings rose, but the sales-to-new-listings ratio stayed high at nearly 70%, putting upward pressure on prices. The benchmark price increased by $7,500 month over month to $342,200, pushing the income needed to qualify up by about $2,000 and monthly mortgage payments up $56 to $1,754.
Ottawa: Sales and prices rise
Ottawa posted stronger sales in June, up 10.6% year over year and above the five-year average. That activity pushed the benchmark price up $4,500 to $634,300. For buyers, the result was an increase in required income of about $1,940 and a $55 rise in the average monthly mortgage payment, to $3,251.
How much mortgage can you afford? How much house can you buy?
Ratehub.ca’s monthly affordability report tracks how home prices and mortgage costs combine to affect affordability across Canada. The analysis uses current home price data and changes in borrowing costs to estimate the income needed to qualify for an average-priced home in each city. To assess your personal situation, use a mortgage affordability calculator that factors your down payment, amortization and monthly expenses.
What’s next for Canadian mortgage rates in 2025?
Further rate relief this year now looks less likely. Fixed mortgage rates increased recently as bond yields — which help determine fixed-rate pricing — moved higher, with the five-year Government of Canada bond yield reaching a six-month high in mid-July. Lenders responded by raising some advertised fixed rates.
Bond yields have been pressured by persistent inflation and global economic uncertainty, including evolving trade tensions that have made investors cautious. Until those macroeconomic pressures ease, bond yields may remain elevated, which would keep fixed mortgage rates higher.
Variable rates are more tied to the Bank of Canada’s policy rate. The Bank has held its key rate steady in recent announcements amid sticky inflation and economic resilience. That suggests variable rates are likely to stay in a holding pattern for now, offering limited upside for borrowers hoping for near-term rate declines.
Further reading on mortgage affordability
- Where to buy real estate in Canada
- The complete guide for first-time home buyers in Canada
- Tools to calculate your mortgage payments and costs in Canada
- Mortgage refinance calculator
- Mortgage renewal calculator
This article was created by a MoneySense content partner.
This is an unpaid article that provides relevant information. It was written by a content partner based on their expertise and edited by MoneySense.