Northern Ontario Housing & Mortgage Monthly

For clients in North Bay, Greater Sudbury, Muskoka, Sault Ste. Marie & Timmins — December 2025

When Good News Hurts Mortgage Rates

Strong economic news often pushes borrowing costs higher, and today was a textbook example.

Canada’s newest job report dramatically outperformed expectations. The unemployment rate dropped from 6.9% to 6.5%, even though markets expected an increase to 7.0%. The economy also added 53,600 jobs, despite forecasters calling for a decline of 5,000.

As soon as the report was released, bond markets reacted. The 5-year Government of Canada bond yield jumped almost 14 basis points immediately and was sitting at 2.955% at 8:48 AM EST. Additional inflation data from the United States later today may move yields further.

This early-morning surge follows a month where many borrowers had finally started to see pressure ease after two policy rate cuts in September and October. December has reminded us just how quickly markets can shift.

A Deeper Look at the Job Numbers

Even though the headline job gain looks strong, the details tell a more complicated story:

• Part-time positions increased by 63,000.
• Full-time positions fell by 9,400.
• Over the past 2 months, full-time employment has dropped by 27,900.
• The labour pool shrank by 26,000 people. 

With fewer people counted in the labour force and more people working, the unemployment rate dropped sharply. That decline was not priced into markets, and higher bond yields are the result. Rising yields typically place upward pressure on fixed mortgage rates.

“Whisper rates” remain available through select lenders, but the window can tighten quickly on days like today.

How December Builds on November’s Shifts

Last month, the central bank reduced the policy rate to 2.25%—the second straight cut—but signaled that the easing cycle is likely nearing its end unless economic conditions weaken. Markets moved into November expecting little movement in early 2026. Borrowers benefitted: funding costs declined, and short fixed terms looked attractive for those wanting to bridge into later-2026.

The challenge now is that December’s stronger-than-expected job data interrupts the downward trend in bond yields we saw through much of October and November. While the long-term outlook remains stable, today’s reaction shows that:

• Borrowers should not assume more rate cuts are coming soon.
• Short 2–3 year fixed terms remain a reasonable strategy, but we will plan assuming current levels hold through winter.
• Variable-rate borrowers may still benefit from recent reductions, but should expect stress testing at an additional 200 basis points.

December’s bond jump reinforces a key message from November: build plans based on today’s rates, with upside treated as a bonus — not a guarantee.

Northern Ontario Market Overview

Greater Sudbury

• September dollar volume: $146.8M
• New listings: 436 (highest September level in 10+ years)
• December guidance: More selection creates negotiating room on conditions and repairs.

North Bay

• September average price: $512,767
• December guidance: Faster-moving segments require pre-approvals and deposits ready in advance.

Sault Ste. Marie

• Benchmark price around $315,100
• Average sale price: $310,811
• December guidance: Well-priced homes still move quickly.

Timmins / Cochrane / Timiskaming

• September average price: $289,796
• Sales above 5- and 10-year seasonal trends
• December guidance: As listings rise, inspections remain critical.

Muskoka (District)

• Waterfront months-of-inventory: 8.6
  
• Median days on market (waterfront): 42
• Median days on market (non-waterfront): 35
• December guidance: Budget for higher taxes, utilities, and insurance—especially for waterfront or short-term-rental-adjacent areas.

Investor Corner

(All November Lender Spotlight underwriting rules remain intact)

Rental markets across Northern Ontario remain tight. Continue using conservative assumptions:

• Vacancy: 3-5%
• Rent growth: : 0–2% over 12 months
• Exit cap spread: 50–75 basis points between purchase and future sale
• Operating cost inflation: insurance +8–12%, utilities +3–6%

December’s strong labour data reinforces the need for conservative underwriting. A hotter labour market may delay meaningful declines in borrowing costs.

What Borrowers Should Do Now

Renewals (Next 6-12 Months)
Short 2–3 year fixed terms continue to be an effective bridge into late-2026. Variable options improved after the autumn cuts, but we will continue stress testing for +200 basis points.

Buyers and Movers
Supply has improved across many Northern Ontario markets. Ensure your pre-approval reflects today’s bond-driven changes.

Investors
Focus on acquisitions that still cash-flow under flat rents and +200 basis point stress scenarios. Longer exit timelines remain prudent for waterfront holdings.

Existing Mortgages

• Variable: small prepayments can help reset amortization.
• Fixed: “blend-and-extend” only if interest saved exceeds penalties based on your true holding period.

The Bottom Line for December

November brought rate relief. December brought a reminder: markets remain sensitive to surprises.

Today’s job report pushed the 5-year Government of Canada bond yield up 17 basis points. If this holds, lenders may begin repricing fixed rates.
Whisper rates are still available, but they will not last if bond yields stay elevated.

If you want a personalized renewal, purchase, or investment analysis, just email This email address is being protected from spambots. You need JavaScript enabled to view it. with the subject line “Run My Numbers” and include your renewal date or target purchase price & down payment.

Thanks for reading!

Caleb O'Connor, CFP
Partner | Financial Planner | Mortgage & Lending Lead, Innova Wealth Partners
Mortgage Agent Level 1, HQ Mortgages Inc.

📧 This email address is being protected from spambots. You need JavaScript enabled to view it. | 🌐 hqmortgages.ca | 📩 This email address is being protected from spambots. You need JavaScript enabled to view it.
Agent Lic. #M25000210 | Brokerage Lic. #12174

This publication is for informational purposes only and shall not be construed to constitute any form of advice. The views expressed are those of the author alone. Opinions expressed are as of the date of this publication and are subject to change without notice and information has been compiled from sources believed to be reliable. This publication has been prepared for general circulation and without regard to the individual financial circumstances and objectives of persons who receive it. You should not act or rely on the information without seeking the advice of the appropriate professional.