Mortgages

By Penelope Graham on April 28, 2025
Estimated reading time: 9 minutes

Created By

Ratehub

By Penelope Graham on April 28, 2025
Estimated reading time: 9 minutes

Is your salary enough to buy a home in these Canadian cities? Here’s how much you needed to earn to qualify for a mortgage in March 2025, compared to February.

Canada’s spring housing market is missing in action. That’s what the latest March data from the Canadian Real Estate Association (CREA) reveals. Home sales plunged to a low not seen for the month since 2009, with transactions down 9.3% year over year.

The sideline approach taken by buyers isn’t a surprise. The ongoing tariff talks and increasingly convoluted trade war have sowed plenty of uncertainty among investors and consumers. No one is keen to make a big purchase on the brink of a potential recession. And until U.S. President Donald Trump stops with tariff threats, it’s unlikely real estate demand will return in full-force.

It’s not surprising that buyers across Canada are hesitant to put an offer on a home right now. Even though the blanket tariffs aren’t yet enforced, the constantly changing rules around them has already harmed real estate markets and stoked fears of a Canadian recession. That’s hardly reassuring for someone considering a home purchase if they’re worried about their job and their savings.

That said, there will always be people who need to buy and sell, whether compelled by life circumstances, such as a new job, divorce and/or an expanding family. And the good news for those who did participate in the March market: Affordability and purchasing power significantly improved.

This is according to the latest March edition of Ratehub.ca’s home affordability report. This study, which calculates the required income to purchase an average-priced home in markets across Canada, found affordability conditions improved in 10 of 13 cities. The analysis uses month-over-month real estate and mortgage rate data to crunch the numbers, along with changes to the mortgage stress test.

Much of the improvements were due to a drop in mortgage rates in March. The Bank of Canada slashed its target interest rate by another 25 basis points on March 12, and bond yields hit a deep low early in the month, in response to Trump’s initial (though brief) roll out of blanket 25% import tariffs on Canadian goods.

That led to a drop in bond yields, which in turn helped push fixed mortgage rates lower. The average five-year fixed rate used in the study fell to 4.38%, compared to 4.55% in February. That in turn lowered the mortgage stress test to 6.38%, from 6.55% the previous month. Combined with softening home prices in several markets, that helped decrease the required income by several thousand dollars in Canada’s priciest markets.

Let’s take a look at how this affects Canadian home buyers across Canada.

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The chart below shows how affordability evolved between February 2025 and March 2025, in Canada’s main housing markets, based on the income required........

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