Mortgage Originations Hit C$40.7 Billion

Canadian mortgage activity surged in June 2025, with total originations climbing 27.5% year-over-year to C$40.7 billion—the second-highest monthly total on record. At first glance, this may suggest a housing rebound. But analysts say the surge tells a more complicated story.

Instead of signaling renewed demand, the jump largely reflects pre-construction contracts sold between 2020 and 2022 that are now coming to completion. Buyers who once expected to finance with cash savings are increasingly turning to lenders, as higher costs and tighter liquidity strain household budgets.

Why This Is Happening

Delayed Closings: Thousands of units purchased at the peak of Canada’s pandemic housing boom are now finishing construction. Many buyers signed contracts years ago at lower deposit requirements.
Rising Costs: Inflation and higher borrowing costs mean fewer households can cover the final payments without a mortgage.
Investor Pressure: Investors with multiple condo units are especially vulnerable, with some struggling to qualify under stricter stress test rules.

Metric	June 2024	June 2025	% Change
Total Mortgage Originations	C$31.9B	C$40.7B	+27.5%
Toronto Condo Market Sales	–	Down ~15%	N/A
Average Toronto Home Price	C$1.16M	C$1.01M	-13%

Market Implications

Mortgage brokers report that stress test hurdles are causing last-minute financing challenges. In Toronto and Vancouver, where condo completions are surging, some investors face the possibility of losing deposits if they cannot secure financing in time.

Housing affordability metrics show only modest improvement. Despite price declines of C$150,000 in Toronto from 2022 peaks, household incomes are not keeping pace, and qualifying for a mortgage remains difficult under current rules.

What Experts Are Saying

Economists warn that while originations are up, arrears could climb into late 2025 as some households buckle under payment burdens.
Brokers highlight growing demand for shorter-term fixed mortgages as buyers hedge against further rate cuts later this year.
Developers worry about assignment sales (buyers flipping contracts before closing), which have slowed significantly in 2025.

Why It Matters

This surge in mortgage originations is not the green shoot of recovery it first appears to be. Instead, it highlights the fragility of Canada’s housing market, where past commitments are colliding with today’s economic realities. If unemployment trends higher, as many forecasts suggest, arrears could increase and put pressure on lenders and homeowners alike.

Mortgage originations may be up, but Canada’s housing market still faces more questions than answers. For borrowers and investors alike, caution is the keyword heading into 2026.

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