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10 New Mortgage Trends Canadians Need to Know before 2025

If you speak to any Realtors or Mortgage Brokers, they will tell you 2024 has been a wild ride for Canada’s real estate market. From falling home prices to shifts of mortgage rates that kept everyone on their toes. It’s been a year full of twists and turns. This blog will help you learn the new mortgage trends this year, and help you make the best mortgage decision in 2025.

At Effortless Mortgage, we’ve been on the frontlines of these changes. To uncovered the top 10 new mortgage trends in 2024, we analyzed the 2000 mortgages we worked in this year. We’ve also interviewed 7 of our top Mortgage Brokers to flush out the best mortgage rates from Banks, B Lenders and Private Mortgage Lenders. 

First, let’s talk numbers: the national average home price in 2024 hit $683,200—a small 0.9% increase compared to last year, according to the Canadian Real Estate Association (CREA). Home sales also jumped by 5.2% year-over-year, thanks to a surge of activity in the second half of the year. 

Meanwhile, every Bank of Canada rate announcement had Canadians anxiously watching, wondering how their budgets or mortgage payments might change. Homebuyers continue to search for affordable options, while many homeowners brace for potential “rate shock” at renewal time. 

What do these trends mean for today’s borrowers? How have mortgage preferences shifted? And what are some of the best advice from top Mortgage Brokers can help you get the best mortgage rates in 2025? Let’s dive in. 

Top Mortgage Trends in 2024

1. Fixed Mortgage Rates Dominate, But Variable Rates Gain Popularity

In 2024, most Canadians chose fixed-rate mortgages for their stability and predictability in uncertain times, but variable rates are catching on as interest rates begin to decline. Let’s break down this trend and what it could mean for you.

  • Fixed Rates is Still King: About 75% of Canadians opted for fixed-rate mortgages in 2024, drawn to the convenience and comfort of steady monthly payments and protection against future rate hikes. 5 year fixed is also the best mortgage rates among all terms. 

  • Variable Rates Are on the Rise: About 25% opted for variable rate mortgage. More borrowers began exploring variable-rate options when rates started dropping the last half of 2024, reflecting renewed optimism that interest rates will continue to drop in 2025.

  • Why Choose a Variable Mortgage? Variable-rate mortgages are appealing for those who want to take advantage of falling interest rates or have the flexibility to adjust their cash flow.

  • Not All Variable Mortgages Are the Same: Did you know there are two types of variable-rate mortgages? Understanding the differences can help you choose the one that fits your financial goals. Check out our short video on Variable Rate Mortgage Options to learn more.

Top Mortgage Trends in 2024: Variable Rates Gained Popularity

Takeaway: The majority of Canadians still prefer fixed rate mortgages because they provide certainty. If you have the flexibility in your cash flow and want to capitalize the downward trend of interest rate, you should consider variable rate mortgages.

2. More Flexible Loan Terms to Accommodate Non-Traditional Income

33% of mortgage applicants were self-employed in 2024, underscoring the critical role of small business owners and gig workers in Canada’s economy.  Mortgage lenders are stepping up to help. Whether you’re self-employed, retired, or earning gig income, getting a mortgage is now more accessible. Here’s how flexible loan terms are making a difference.

  • Self Employed, Freelancers and Gig Workers: Unlike T4 income earners, self-employed borrowers often face hurdles when applying for a mortgage. Despite strong cash flow, they may report lower taxable income, which traditional A lenders, like big banks, rely on for approvals. Lenders now accept alternative income verification, such as bank statements or gig economy earnings, making it easier for self-employed to qualify.

  • Tailored Solutions for Retirees: Instead of relying solely on employment income, lenders are considering pensions, investments, and other assets to help retirees secure loans. Mortgage Brokers also receive a lot of inquires for retirees with limited income. In these scenarios, Reverse Mortgage, B Lender Mortgage and Private Mortgage Loans can help these to stay in their home longer while making interest only or no mortgage payment for the time being. 

And, borrowers can access more options like interest-only loans, adjustable-rate mortgages, or extended loan terms of up to 40 years to lower monthly payments.

Download Our Mortgage Guide for the Self-Employed

Getting a mortgage when you’re self-employed might seem tricky, but it doesn’t have to be. This guide breaks it all down in simple terms—what lenders look for, how to show your income, and the steps to get approved. If you’re a freelancer, business owner, or gig worker, we’ve got you covered with tips to make the process easier!

Takeaway: For self-employed Canadians and those with non-traditional financial situations, 2024 is a year of new opportunities. If big banks are turning you away, consider the flexibility of B Lenders and Private Lenders for customized mortgage options that work for your goals and situation.

3. Increased Demand for B Lender and Private Lender Mortgages

15% more Canadians opted for B or private lender mortgages in 2024 compared to last year. These alternative lenders offered a lifeline for borrowers facing challenges with income or credit. Here’s why demand is growing and what you should know.

  • Why B and Private Lenders Stand Out:

    • These lenders are more flexible with credit scores and income verification.
    • They often accept low or no-document applications, making them accessible to self-employed or credit-challenged borrowers.
    • The key differences between A Lenders vs. B Lenders vs. Private Mortgage Lenders is flexibility around income and credit scores.
  • Higher Rates Come with Higher Risks:

  • Private Mortgage Loans Are for Short-Term Needs:

    • Private mortgages should only be considered temporary solutions for immediate financial relief.
    • At Effortless Mortgage, our private mortgage specialists help borrowers plan their exit strategy before securing private loans.
  • Key Insight: The shift toward B and private lenders highlights the challenges many Canadians face with traditional mortgages, from higher rates to tougher approval criteria.

Takeaway: If you’re having trouble getting approved by big banks, B lenders and private lenders could be the solution. Just keep in mind that these options often come with higher costs. Speak with a mortgage expert to weigh the pros and cons and create a plan that works for you.


Private mortgage with bad credit

4. Declining Mortgage Rates

Mortgage rates have been trending downward. Both fixed and variable rates saw notable declines, giving Canadians a chance to lock in better deals or refinance to save on costs. Here’s how rates have shifted this year and what it means for you.

  • Best Mortgage Rates for Fixed Terms Dropped by 0.87%: For A lenders, 5-year fixed rates fell from 6.31% in January 2024 to 5.44% in October 2024—a significant drop over just 10 months.

  • If we single out A Lender Mortgages only, per Stats Can, the 5 Year Fixed Mortgage Rates are down from 6.31% in January 2024 to 5.44% in October 2024, representing a 87 bps (or 0.87%) decline over 10 months period.
Government of Canada Stats Can
  • Variable Rates Fell Even More: Variable mortgage rates saw a bigger decline, dropping from 5.95% at the start of 2024 to 4.7% in October 2024, a decrease of 1.25%.
  • Average Rates for All Mortgages:

    • For first mortgages (including A, B, and private lenders), the average rate in 2024 was 6.87%.
    • For second mortgages, the average rate climbed to 11.61%, reflecting their higher risk and cost.
  • Why Do Rates Move Differently?

    • Fixed mortgage rates are influenced by bond yields.
    • Variable mortgage rates follow the Bank of Canada’s overnight rate. While they move in similar directions, they don’t always align perfectly.

Takeaway: If you’ve been waiting to lock in a better rate, now is the time. With rates trending down, explore refinancing or variable rate options to maximize your savings. Speak to a mortgage advisor to find the best option for your financial goals.

5. The Rise of Co-Ownership and Family Help

As housing prices stay high, more Canadians are teaming up to buy homes together. Co-ownership, where friends, family members, or even unrelated buyers share a property, is becoming a practical way to enter the market. Here’s how this trend is reshaping homeownership.

  • Affordability: Splitting the cost of a home makes it easier to handle the down payment and monthly mortgage. It’s a solution for buyers struggling with today’s high housing prices.

  • Shared Equity Agreements: Co-ownership isn’t just informal. Buyers are using legal agreements to define how costs, responsibilities, and profits are shared, making the arrangement smoother and more secure.

  • Appeal for Younger Buyers: Millennials and Gen Z are leading this trend, pooling resources with siblings or friends to break into the housing market.

  • Lender Support Is Growing: Some lenders are now offering mortgage products tailored for co-ownership, making it easier to qualify as a group.

Takeaway: Co-ownership is opening doors for Canadians priced out of the traditional market. If you’re considering this option, work with a mortgage advisor to understand the financial and legal details and set clear terms with your co-owners. It’s a creative way to achieve homeownership together.

6. Cash Flow is the Top Priority

Managing monthly cash flow became the deciding factor for Canadians choosing a mortgage. With rising costs across the board, borrowers are focusing less on the lowest interest rate and more on how their payments fit their budget. 

  • Why Cash Flow Matters More Than Interest Rates:

    • A lower interest rate doesn’t always mean lower payments. For example:
      • A $500,000 mortgage at 3.99% over 25 years has a monthly payment of $2,627.40.
      • The same mortgage at 4.99% over 35 years drops to $2,503.99. A higher rate but lower monthly cost due to the longer amortization.
  • Default Insured Mortgages Aren’t Always Cheaper:

    • While default insured mortgages often have lower rates and allow first time home buyers to put in as little as 5% down payment — shorter amortization periods and default insurance premiums (often 1% to 4% of the mortgage principal) can make monthly payments higher than expected.
  • Big Changes Are Coming:

    • The Government of Canada has announced bold reforms to help borrowers manage cash flow, including:
      • Reintroducing 30-year amortizations for insured mortgages.
      • Raising the insured mortgage limit from $1 million to $1.5 million starting December 15, 2024.

Takeaway: Don’t just chase the lowest rate—focus on what fits your budget. Work with an experienced mortgage broker to find the right product that balances interest rates, amortization, and monthly payments to meet your cash flow needs. It’s all about making your mortgage work for you.

7. Harder to Qualify Due to Falling Home Values

In 2024, declining home values have made it harder for Canadians to refinance or buy homes. Lenders are tightening their rules, and appraisals are playing a bigger role than ever in the mortgage process. 

  • Home Equity Is the Biggest Hurdle:

    • The top obstacle for refinancing is insufficient home equity, especially as appraised values fall in some markets.
  • Why Appraisals Matter:

    • When Buying a Home: If the appraised value is lower than the purchase price, you’ll need to make a bigger down payment. For example, buyers of pre-construction properties may face funding gaps if the appraised value comes in lower at closing.
    • When Refinancing: A lower appraisal can leave homeowners without any equity to access. For instance:
      • If you have a $400,000 mortgage and expect your home to be worth $700,000, you could refinance up to $560,000 (80% of the value) and access $160,000 in equity.
      • But if the appraisal comes back at $500,000, your current $400,000 mortgage already hits the 80% limit, leaving no equity to withdraw.
  • Tips to Maximize Your Appraisal:

  • How to Avoid Surprises:

    • Consider getting an upfront appraisal before refinancing or buying. This can help you understand your options and avoid last-minute setbacks.

Takeaway: Whether you’re buying or refinancing, focus on accurate appraisals and work with a mortgage advisor to explore your options. Planning ahead can save you time, stress, and money.

8. Mortgage Pre-Approvals Are Gaining Popularity

In 2024, more than 50% of homebuyers secured a pre-approval before making an offer. Pre-approvals give buyers confidence and a competitive edge. Here’s why pre-approvals are becoming a must-have step.

  • Why Pre-Approvals Matter:
    • Know Your Budget: Pre-approvals tell you exactly how much mortgage you qualify for based on your income, credit, and down payment.
    • Avoid Surprises: They also help identify and address issues upfront. For example:
      • If your debt-to-income ratio is too high, a Mortgage Advisor might suggest paying off higher-interest debts to boost your chances of approval.
  • Lock in Best Mortgage Rates for Peace of Mind:
    • Pre-approvals lock in a rate for up to 120 days. It’s always good to know you are protected against any potential rate increases before you put in a firm purchase offer.
    • Even in a declining rate environment, having a pre-approval means you’re prepared for unexpected market shifts caused by economic or geopolitical changes.
  • Mortgage Pre-Approval Checklist: To support homebuyers and homeowners, we created a Mortgage Pre-Approval Checklist that can be downloaded.
Top Mortgage Trends in 2024: Increased Mortgage Pre-Approvals

Takeaway: Getting pre-approved isn’t just smart—it’s essential. It helps you know your numbers, tackle any issues, and secure a rate before making a big commitment. Talk to a Mortgage Advisor to get pre-approved and shop with confidence.

9. Shorter Term Mortgages Are on the Rise

More Canadians are opting for shorter mortgage terms. With rates expected to drop in the next 1–3 years, many borrowers are choosing shorter terms to keep their options open. 

  • Average Terms Are Getting Shorter:

    • The average fixed-rate term is now just 31.7 months—around two and a half years.
    • Three-year mortgages were especially popular in the summer of 2024 as borrowers prepared for potential rate cuts.
  • B Lender Mortgage and Private Mortgage Lender Options:

    • Canadians turning to B lenders or private mortgage lenders often see even shorter terms, typically 1-year loans, which offer flexibility. B Lender Mortgage Rates are typically higher than Banks.
  • Why Borrowers Are Choosing Shorter Terms:

    • Many Canadians expect rates to drop soon in the next 6 to 12 months
    • Shorter terms put borrowers in the driver’s seat to take advantage of best mortgage rates and terms without worrying about pre-payment charges.
  • Pro Tip:

    • While fixed rates provide predictable payments, breaking a fixed-rate mortgage before the term ends can come with steep penalties. 
    • A variable rate mortgage allows your interest payment to decrease as the Bank of Canada Rate drops and it has a much smaller prepayment penalty so you have flexibility to make changes. 
    • 1 to 3 year terms may give you the best of both worlds
    • Learn more about the types of Variable Rate Mortgage: Most Don’t Know This: Variable Rate Mortgage Options to Save $$$

Takeaway: Shorter fixed terms are ideal for borrowers who want flexibility and expect rates to decline. However, it’s important to weigh the flexibility against the risks of higher interest payment in the immediate term.

10. Increase of Digital-First Mortgage Brokers

In 2024, more Canadians are turning to digital-first brokerages for their mortgage needs. With everything available online, platforms like Effortless Mortgage make the process faster, simpler, and more accessible. Gen Z, the first fully digital generation, is leading the charge in this shift to online mortgage solutions.

  • Gen Z is Driving the Change:

    • As tech-savvy homebuyers, Gen Z prefers the speed and simplicity of online platforms over traditional in-person processes.
  • Convenience is Key:

    • Borrowers can apply for a mortgage, upload documents, and get approvals—all from their phone or computer. No appointments or paperwork are needed.
    • Effortless Mortgage offers 24/7 accessibility, letting you handle your mortgage on your schedule.
  • Faster Approvals with Technology:

    • Digital-first platforms use automations and partnerships with other secure platforms to speed up approvals, giving borrowers quicker decisions without compromising accuracy.
  • Transparent and Tailored:

    • Borrowers get personalized loan options based on their financial situation.
    • Tools like live rate comparisons and online calculators help you make informed decisions every step of the way.
  • More Canadians Are Choosing Digital:

    • With over 50% of borrowers in 2024 preferring online platforms, the shift to digital-first brokerages is undeniable.

Takeaway: Digital-first Mortgage Brokers are transforming the mortgage experience. If you value speed, transparency, and convenience, going digital could be the smartest choice for your next mortgage. Apply online today and see how easy it can be!

10 New Mortgage Trends to Help You Find Best Mortgage Rates in 2025

Conclusion: What Does it Mean for Your Mortgage in 2025

These top 10 mortgage trends have certainly made a defining year for Canadian mortgages, full of changes shaped by declining interest rates, stricter lending rules, shifting borrower priorities, and a slow housing market.

Whether you’re buying your first home, looking to refinance, or planning your next move, these trends show just how important it is to stay informed. Knowing what’s happening in the market can help you make smarter decisions for yourself and your family in 2025.

This year was all about flexibility and finding solutions that work. From shorter terms and co-ownership models to the growing need and popularity of B lenders and digital-first brokerages like Effortless Mortgage, the way Canadians approach mortgages is evolving. Pre-approvals became essential for homebuyers, while managing cash flow topped the priority list for most Canadians.

At Effortless Mortgage, we’ve been proud to help Canadians navigate these changes. Our Mortgage Brokers are here to guide you through your options, tackle challenges, and find the best rates for your needs.

Ready to take the next step? Let’s make your mortgage journey simple, stress-free, and effortless. Contact us today!


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