What’s Driving Canadian Homebuyers?
Marci • February 20, 2018
Mortgage rule changes and increasing interest rates—surprisingly—weren’t the top motivators for prospective homebuyers in 2017, according to a new survey from the Canada Mortgage and Housing Corporation (CMHC).
Instead, the 2018 Prospective Home Buyers Survey found that improved accessibility (i.e., fewer physical obstacles and barriers) and investment opportunity were the main driving factors to purchase a home.
The results were divided into three segments of buyers: first-time buyers, previous owners (who had previously owned a home but do not currently) and current owners.
For first-time buyers and previous owners, the desire to stop renting was ranked as one of the top three motivators to buy a home by 65% and 60%, respectively.
“The majority of prospective home buyers from all groups agree that home ownership is a good long-term financial investment,” the survey noted.
This is the first time CMHC has conducted this specific study, which examined attitudes and expectations of prospective Canadian homebuyers, as well as their understanding of the homebuying process.
There was also some positive news for brokers, as the survey confirmed that a majority of buyers from all three groups—including a full 80% of first-time buyers—planned to consult a mortgage broker before making their home purchase.
Here are some of those findings:
Mortgage Rule Changes, Home Prices & Rising Interest Rates
- 36% of first-time buyers were aware of the 2016 mortgage qualification rule changes
(e.g., the 10% down payment required for the home price portion above $500,000 and the requirement for all insured mortgages to be stress-tested using the 5-year posted rate).
- 53% of previous owners and 58% of current owners were aware.
- 20% of first-time buyers not previously aware of the rule changes said it will impact their purchase decision in some way.
- Vs. 18% of previous owners and 14% of current owners.
- 50% of first-time buyers said the changes would cause them to delay their home purchase, while 23% would purchase a smaller home.
- 51% of previous owners and 65% of current owners would delay their purchase
- 35% of previous owners and 32% of current owners would purchase a smaller home
- 76% of first-time buyers said they are likely to delay their home purchase due to high home prices , followed by 73% of previous owners and 63% of current owners.
- 70% of first-time homebuyers said they are concerned about the possibility of interest rates increasing before they buy their home, followed by 62% of previous owners and 61% of current owners.
- 61% of first-time buyers would, as a result, likely delay their home purchase, followed by 61% of previous owners and 50% of current owners.
Homebuying Expectations
- 69% of first-time buyers agree that they have a good understanding of how much mortgage they can afford.
- Vs. 79% of previous owners and 83% of current owners.
- 54% of first-time buyers and previous owners are planning to spend under $300,000 on their next home.
- Vs. 33% of current owners.
- 25% of first-time buyers and previous owners are planning to spend between $300,000 and $500,000 on their next home.
- 34% of current owners are planning to spend over $500,000 on their next home.
- 68% of first-time homebuyers feel confident they can find a suitable home within their budget.
- Vs. 83% of current owners.
In a scenario where buyers would not be able to find their ideal home:
- 43% of first-time buyers would delay their purchase.
- Vs. 45% of previous owners and 28% of current owners.
- 42% of first-time buyers would compromise on the size of the home.
- Vs. 39% of previous owners and 42% of current owners.
- 38% of first-time buyers would compromise on the location of the home.
- Vs. 39% of previous owners and 38% of current owners.
Buying Preparedness
- 80% of first-time homebuyers plan to consult with a mortgage broker before purchasing a home.
- Vs. 72% of previous owners and 69% of current owners.
- 16% of first-time buyers pre-qualify for a mortgage within three months of purchasing their home.
- Vs. 21% of previous owners and 22% of current owners.
- 33% of all buyers prepare a detailed budget on their own within six months to a year before purchasing their home.
Financing home
- 66% of first-time buyers say they have a good understanding of the full cost of homeownership, including mortgage payments, property taxes, condo fees, utilities, maintenance, etc.).
- Vs. 79% of previous owners and 85% of current owners.
- 33% of all homebuyers say they will take additional steps to pay down their mortgage as soon as possible.
- 40% of first-time buyers and previous owners say they are unlikely to have a financial buffer in case their expenses change in the future.
- 40% of first-time buyers say they are confident they have the necessary tools and information to manage their mortgage and debt load.
- Vs. 40% of previous owners and 50% of current owners.
Homebuyers and Technology
- 68% of first-time homebuyers would prefer to complete the entire homebuying process with help from a professional and be using online tools and resources:
- Vs. 60% of previous owners and 58% of current owners.
- 7% of first-time buyers would prefer to use online tools and resources exclusively, without the help of a professional:
- Vs. 4% of previous owners and 5% of current owners.
This article was originally published on Canadian Mortgage Trends on Feb 14th 2018, written by Steve Huebl.
Share
Apologies in advance for all the baseball puns! We are fully on the Blue Jay bandwagon over here ad loving every minute of it! Who knew baseball could be so much fun and wow, the strategy!! Very impressed!! As you likely heard, the Bank of Canada took the mound and cut the BOC policy rate to 2.25% which will push prime down to 4.45%. That’s the lowest since mid-2022. This was not a celebratory pitch. It was a damage-control adjustment to help an economy that’s limping between bases. Why the BoC Made the Move Think of the economy as a lineup that’s losing steam: GDP contracted — investment and exports are getting jammed inside Jobs remain soft — hiring is weak, unemployment is climbing Trade uncertainty (especially CUSMA renewal drama) has businesses choking up on the bat Consumers are still swinging , but they can’t win the series alone Inflation Scoreboard Inflation isn’t a shutout, but the score is manageable: CPI hovering near 2–2.5% Core still “sticky” around 3%, but trending lower BoC believes price pressures will cool further in coming innings That gave them the green light to make this cut without risking a walk-off inflation disaster. Forward Guidance = “Don’t Expect Extra Cuts Right Away” Macklem essentially said: If the game plays out as expected, this is the right rate for now. Translation: barring a shock, don’t expect another cut in December. This is likely a pause , not the start of an aggressive easing cycle. Markets agree — odds of another cut next meeting are tiny.
Bank of Canada lowers policy rate to 2¼%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario October 29, 2025 The Bank of Canada today reduced its target for the overnight rate by 25 basis points to 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. With the effects of US trade actions on economic growth and inflation somewhat clearer, the Bank has returned to its usual practice of providing a projection for the global and Canadian economies in this Monetary Policy Report (MPR). Because US trade policy remains unpredictable and uncertainty is still higher than normal, this projection is subject to a wider-than-usual range of risks. While the global economy has been resilient to the historic rise in US tariffs, the impact is becoming more evident. Trade relationships are being reconfigured and ongoing trade tensions are dampening investment in many countries. In the MPR projection, the global economy slows from about 3¼% in 2025 to about 3% in 2026 and 2027. In the United States, economic activity has been strong, supported by the boom in AI investment. At the same time, employment growth has slowed and tariffs have started to push up consumer prices. Growth in the euro area is decelerating due to weaker exports and slowing domestic demand. In China, lower exports to the United States have been offset by higher exports to other countries, but business investment has weakened. Global financial conditions have eased further since July and oil prices have been fairly stable. The Canadian dollar has depreciated slightly against the US dollar. Canada’s economy contracted by 1.6% in the second quarter, reflecting a drop in exports and weak business investment amid heightened uncertainty. Meanwhile, household spending grew at a healthy pace. US trade actions and related uncertainty are having severe effects on targeted sectors including autos, steel, aluminum, and lumber. As a result, GDP growth is expected to be weak in the second half of the year. Growth will get some support from rising consumer and government spending and residential investment, and then pick up gradually as exports and business investment begin to recover. Canada’s labour market remains soft. Employment gains in September followed two months of sizeable losses. Job losses continue to build in trade-sensitive sectors and hiring has been weak across the economy. The unemployment rate remained at 7.1% in September and wage growth has slowed. Slower population growth means fewer new jobs are needed to keep the employment rate steady. The Bank projects GDP will grow by 1.2% in 2025, 1.1% in 2026 and 1.6% in 2027. On a quarterly basis, growth strengthens in 2026 after a weak second half of this year. Excess capacity in the economy is expected to persist and be taken up gradually. CPI inflation was 2.4% in September, slightly higher than the Bank had anticipated. Inflation excluding taxes was 2.9%. The Bank’s preferred measures of core inflation have been sticky around 3%. Expanding the range of indicators to include alternative measures of core inflation and the distribution of price changes among CPI components suggests underlying inflation remains around 2½%. The Bank expects inflationary pressures to ease in the months ahead and CPI inflation to remain near 2% over the projection horizon. With ongoing weakness in the economy and inflation expected to remain close to the 2% target, Governing Council decided to cut the policy rate by 25 basis points. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. If the outlook changes, we are prepared to respond. Governing Council will be assessing incoming data carefully relative to the Bank’s forecast. The Canadian economy faces a difficult transition. The structural damage caused by the trade conflict reduces the capacity of the economy and adds costs. This limits the role that monetary policy can play to boost demand while maintaining low inflation. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is December 10, 2025. The Bank’s next MPR will be released on January 28, 2026. Read the October 29th, 2025 Monetary Report
Owning a home feels great—carrying a large mortgage, not so much. The good news? With the right strategies, you can shorten your amortization, save thousands in interest, and become mortgage-free sooner than you think. Here are four proven ways to make it happen: 1. Switch to Accelerated Payments One of the simplest ways to reduce your mortgage faster is by moving from monthly payments to accelerated bi-weekly payments . Instead of 12 monthly payments a year, you’ll make 26 half-payments. That works out to the equivalent of one extra monthly payment each year, shaving years off your mortgage—often without you noticing much difference in your budget. 2. Increase Your Regular Payments Most mortgages allow you to boost your regular payment by 10–25%. Some even let you double up payments occasionally. Every extra dollar goes directly toward your principal, which means less interest and faster progress toward paying off your balance. 3. Make Lump-Sum Payments Depending on your lender, you may be able to make lump-sum payments of 10–25% of your original mortgage balance each year. This option is ideal if you receive a bonus, inheritance, or other windfall. Applying a lump sum directly to your principal immediately reduces the interest charged for the rest of your term. 4. Review Your Mortgage Annually It’s easy to put your mortgage on auto-pilot, but a yearly review keeps you in control. By sitting down with an independent mortgage professional, you can check if refinancing, restructuring, or adjusting terms could save you money. A quick annual review helps ensure your mortgage is always working for you—not against you. The Bottom Line Paying off your mortgage early doesn’t require a massive lifestyle change—it’s about making smart, consistent choices. Whether it’s accelerated payments, lump sums, or regular reviews, every step you take helps reduce your debt faster. If you’d like to explore strategies tailored to your situation—or want a free annual mortgage review—let’s connect. I’d be happy to help you find the fastest path to mortgage freedom.
