What’s Moving Canada’s Mortgage Market This Week — August 2025 Outlook

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The first week of August is shaping up to be an important one for Canada’s mortgage market, with several key data releases and economic signals on the horizon. Mortgage brokers, lenders, and homebuyers alike are keeping a close watch on the numbers, as they could influence borrowing costs, housing demand, and rate expectations for the rest of 2025.

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Three Big Factors in Focus

According to Canadian Mortgage Trends and industry analysts, the next several days bring three major events that could set the tone for the mortgage market:

1. July Home Sales Reports — data from major Canadian cities, including Vancouver, Toronto, Calgary, Ottawa, and Montreal.
2. June Trade Data — to be released by Statistics Canada, highlighting Canada’s export performance and the impact of U.S. tariffs.
3. July Labour Force Survey — one of the most important indicators for the Bank of Canada’s (BoC) policy direction.

Each of these releases will feed into the broader conversation about inflation, interest rates, and affordability — all of which directly affect mortgage rates and buyer sentiment.

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Housing Market Data: A Mid-Summer Temperature Check

The July housing reports from Canada’s largest metropolitan areas will be closely scrutinized for signs of stabilization or continued weakness.

• Vancouver: After a 10% drop in June, sales fell just 2% in July, suggesting the market may be finding its footing. Inventory is rising, which could give buyers more leverage.
• Toronto: The GTA market has been weighed down by high borrowing costs and soft pre-construction sales. Observers are watching to see if resale demand holds steady.
• Calgary & Ottawa: Both markets saw surges in inventory mid-year, and analysts want to know if sales have kept pace.
• Montreal: The market has been relatively resilient compared to Ontario and B.C., but affordability concerns are growing.

For mortgage professionals, the city-by-city numbers provide valuable insight into which markets are heating up or cooling down — essential for advising clients on timing and strategy.

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Trade Data: The Economic Backdrop

The June trade data release will give a snapshot of how Canada’s exporters are faring amid global uncertainty. The most pressing question: how much impact have U.S. tariffs had on Canada’s GDP growth?

• A weaker trade balance could point to slower economic momentum, increasing the likelihood of future BoC rate cuts.
• Conversely, a stronger-than-expected trade surplus might signal that the economy can withstand higher rates a bit longer.

Why this matters for mortgages: Economic strength or weakness directly influences the BoC’s willingness to adjust interest rates. A slowing economy tends to support lower rates, which can ease mortgage payments and improve affordability.

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Labour Force Survey: The Wild Card

The July Labour Force Survey is arguably the most important release this week for the mortgage market. Employment data affects consumer spending, household confidence, and inflation pressure — all critical inputs for the BoC.

Key indicators to watch:

• Job Creation: Strong job growth could suggest that the economy remains resilient, keeping upward pressure on rates.
• Unemployment Rate: A rising unemployment rate would be a red flag for policymakers and could accelerate calls for a rate cut.
• Wage Growth: Higher wages support consumer spending but can also fuel inflation, potentially delaying rate relief.

Mortgage rates tend to be particularly sensitive to this report because it can shift bond yields quickly — and fixed mortgage rates are closely tied to bond market movements.

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Why This Week Matters for Mortgage Rates

Fixed mortgage rates in Canada have been relatively stable over the past month, with lenders maintaining cautious pricing amid uncertainty about BoC policy. Variable rates remain elevated, tracking the Bank’s policy rate of 2.75% (as of July 2025).

Here’s how this week’s data could affect rates:

• Soft Housing, Weak Trade, Weak Jobs: Likely to push bond yields down, increasing the odds of a BoC rate cut in the next 1–2 meetings.
• Strong Housing, Strong Trade, Strong Jobs: Could support higher bond yields, leading lenders to hold or even slightly raise fixed rates.

For borrowers on the sidelines, these reports could influence whether they lock in now or wait for potentially better rates later in the year.

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Broker Perspective

Many mortgage brokers are advising clients to secure a pre-approval now, locking in current rates while retaining flexibility to take advantage of any future rate drops.

“Market timing is tricky,” one Toronto-based broker told Mortgage.Expert. “If you wait for the perfect rate environment, you could miss out on the right property. This week’s data will help clarify whether we’re closer to a rate cut or stuck in holding pattern territory.”

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What Borrowers Should Do This Week

• Track the Data: Even if you’re months away from buying, knowing the macro trends helps you plan.
• Consider Rate Holds: Many lenders will let you hold a rate for 90–120 days, providing insurance against potential hikes.
• Evaluate Fixed vs. Variable: If you expect rates to fall in the next year, a shorter fixed term or a variable rate could be appealing — but comes with risk.
• Check Market-Specific Trends: Your city’s housing data matters more than the national average when it comes to competitive pricing.

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Key Takeaways

• The mortgage market will be shaped this week by July home sales, June trade data, and the July Labour Force Survey.
• These releases will influence bond yields and, by extension, fixed mortgage rates.
• Variable rates are holding steady for now but could shift if the BoC signals a change in policy.
• Brokers recommend pre-approvals and rate holds to navigate the uncertainty.
• Local housing market data remains critical for setting expectations in specific cities.