When a WestJet flight recently experienced a jarring hard landing in St. Maarten, it made headlines for all the right—and wrong—reasons. And while this isn’t your usual mortgage news item, the turbulence experienced mid-air got me thinking about the financial headwinds facing Canadian homeowners right now.
Just like that unsettling landing, the Canadian housing market has felt anything but smooth in recent months. With rates rising and market uncertainty looming, it’s fair to say that many homeowners are bracing for impact. If you’re holding a variable-rate mortgage or looking to renew soon, you’re probably already feeling some shake in your seatbelt.
What the Hard Landing Tells Us About Risk Tolerance
In aviation, even experienced pilots can hit unexpected turbulence. The same goes for homeowners navigating today’s real estate market.
With inflation proving stickier than anticipated and the Bank of Canada holding rates at a 22-year high of 5.00%, many who locked in low variable rates or stretched to buy during the pandemic are now re-evaluating their decisions. Pair that with elevated home prices—still 33% above pre-pandemic levels, according to CREA—and it’s not surprising that financial stress is building across households.
Just as passengers on the WestJet flight demanded answers, Canadians are asking: where is this market heading—and how do we prepare?
Rate Anxiety: The Mid-Air Jitters for Mortgage Holders
Let’s be real—most Canadians aren’t lying awake thinking about global monetary policy. But they are watching their mortgage payments rise, especially variable-rate holders. These borrowers have felt the sting of every BoC hike over the past two years.
For example, a homeowner with a $600,000 mortgage at 2% may now be paying closer to 6%, pushing up monthly payments by over $1,200. That’s not a minor budget shift. It’s enough to strain family finances or re-think retirement plans.
We’re getting more calls every week from clients asking whether to refinance into a fixed rate, or explore options like a HELOC to tap equity without selling. In both cases, the question is the same: how much turbulence lies ahead?
Housing Momentum is Losing Altitude
Flight analogies aside, Canada’s housing data is showing signs of descent. National home sales declined 5.6% in April according to the Canadian Real Estate Association. Inventory has also started to creep up, a reversal from the tight market we saw during COVID peaks.
Rising interest rates have cooled buyer appetites and stretched affordability. The average Canadian household now spends nearly 63% of its income on mortgage payments—a level not seen since the early ’90s. That’s a lot of strain built into the system.
This slowdown isn’t all bad news. For prospective buyers, it could mean less competition and more negotiating power. But for current homeowners, especially those who bought in the last 12–24 months, declining home values could mean growing risk of negative equity.
If you’re unsure whether now is a good time to make a move, try running the numbers with our mortgage calculator to test different rate and payment scenarios based on your current mortgage.
Looking Ahead: Can We Expect a Softer Landing?
The wild card remains inflation—and how the Bank of Canada responds to it. If consumer prices continue to cool in late 2024, we might see a gradual drop in mortgage rates. But no one is betting on a quick return to the ultra-low rates of 2020–2021.
For those nearing retirement, high rates make reverse mortgages a more attractive way to access equity without selling. And for new buyers, considering a fixed-rate mortgage could provide a smoother ride through uncertain times.
As with flying, trusted guidance can make all the difference. A good broker helps you plot a safe route—based on your capacity, plans, and timelines.
Final Thoughts
Hard landings—whether in planes or property markets—remind us that stability is never guaranteed. But with the right strategy, you can still arrive safely at your financial destination.
If you’re unsure whether it’s time to adjust your mortgage, evaluate new options, or tap into equity before rates shift again, we’re here to help. Visit Unrate to compare the best mortgage rates in Canada—tailored to your needs and goals.
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