Nearly 1 in 10 Toronto mortgage holders can't refinance next year
Bank of Canada data shows 9% of Toronto borrowers lack equity to refinance, double the national rate, as home values remain depressed.
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Toronto homeowners remain vulnerable in the refinancing market, with nearly one in 10 mortgageholders unable to qualify for renewal next year, according to a Bank of Canada report.
The rate is more than double the national average. The issue: falling home values have eroded the equity cushion borrowers need to refinance. The Toronto Regional Real Estate Board put the average home price in the city at $1.07 million this month—down roughly 20 percent from the market peak in early 2022.
Borrowers with weak income growth over the past five years face the tightest squeeze. The Bank of Canada warned the situation could worsen: a 10 percent drop in home values would push the share of Toronto borrowers unable to refinance to 12 percent.
This creates a paradox. Lower home prices have helped buyers, but have left many owners in a precarious position. Those who bought near the 2022 peak face a weaker housing market that compounds the sting of higher interest rates.