How much income do you need to buy a home in Canada? A look at housing affordability in October 2025

If Canada’s autumn housing market could be summed up in one word, it would be tentative; home sales continue to lag year-over-year levels, as buyers remain cautious due to ongoing economic uncertainty. According to the latest data from the Canadian Real Estate Association (CREA), October transactions were 4.3% below last year’s activity.

However, there are some green shoots—the same report indicates conditions are starting to firm up in some local markets, with monthly sales increases starting to eat into built-up inventory. Overall, though, market conditions remain firmly in buyers’ favour—and that’s reflected in today’s home prices, which are relatively soft compared to the pandemic-era market. The national home price benchmark, which strips out the high and low sales extremes, remains 3% below 2024 levels.

For anyone looking to buy a home in October, that meant decent affordability conditions in 10 of 13 of Canada’s major markets, according to the latest affordability study from Ratehub.ca. This monthly report gauges how affordability evolves in real time in the country’s 13 largest urban centres, based on real estate data, mortgage rates, and the mortgage stress test. Affordability is defined by the amount of income a buyer would need to earn to qualify for a mortgage on the average-priced home in their city.

Mortgage rates were largely unchanged over the course of the month, with discounts only passed on by lenders towards the final days of October, when the Bank of Canada cut its benchmark rate by a quarter of a percentage point, and bond yields dipped in response. The average five-year fixed mortgage rate used in the study stayed the same as September at 4.47%, with a corresponding mortgage stress test of 6.47%.

That meant for the majority of the month, home prices were the main factor impacting affordability.

Let’s unpack how this impacted home purchasing power in markets across Canada in October.

Housing affordability across Canada’s major cities

The table below shows how affordability evolved between September 2025 and October 2025, in Canada’s main housing markets, based on the income required to qualify for a mortgage. Income required is based on the stress test rates of 6.47% in both September and October, along with a mortgage rate of 4.47%.

This report is for illustration purposes only. Data is based on a mortgage with a 10% down payment, 25-year amortization, $4,000 annual property taxes and $150 monthly heating. Mortgage rates are the average of the Big Five Banks’ 5-year fixed rates in September and October 2025. Average home prices are from the CREA MLS® Home Price Index (HPI). 

Check Canadian mortgage rates

Customize the filters to compare rate types and terms.

powered by

Canadian cities where affordability improved

Where in Canada is owning a home becoming more affordable?

Amid firming borrowing costs and early signs of recovering sales, just one housing market bucked the trends of worsening affordability.

Vancouver: Conditions tilted towards buyers

While still Canada’s most expensive real estate market, the City of Vancouver experienced the greatest improvement in affordability between September and October, as sales dropped and built-up inventory continued to expand. According to data from the Greater Vancouver Realtors (GVR), home sales decreased 14.3% year over year in October, remaining 14.5% below the region’s 10-year average.

That resulted in the average home price to fall $9,600 on a monthly basis, to $1,132,500, and the required income to purchase a home by $1,800. Given this persistently high home price threshold, buyers remain firmly on the sidelines; “Even the fourth cut this year to the Bank of Canada’s policy rate this October wasn’t enough to entice more buyers back into the market,” said GVR Chief Economist Andrew Lis, in the board’s October release.

Hamilton: Oversupply puts the chill on price growth

Slower economic conditions have also put the damper on Hamilton real estate; according to the Realtors Association of Hamilton-Burlington, October home sales remain 34% typical levels for the month, as persistently high supply levels put downward pressure on prices, says spokesperson Nicolas von Bredow.

“Many were hopeful that the recent policy rate cut from the Bank of Canada would attract more buyers; however, slowing economic conditions and a decrease in migration are likely continuing to weigh on confidence in the market,” he states in the association’s October release.

Hamilton’s average home price dropped $6,100 month over month in October to $747,200, and the required income by $1,150, placing the Golden Horseshoe city in second place in terms of improved affordability.

Edmonton: Easing back to balance

After a hot run in 2024, Edmonton’s housing market has eased towards balance this year, as sales have chilled 17% annually, and new listings have recovered by nearly 15%.

“October’s numbers suggest a natural seasonal slowdown,” says Darlene Reid, 2025 Board Chair of the REALTORs Association of Edmonton in their monthly release. “While month-over-month activity has slowed, sales and prices remain notably higher than this time last year, signalling a market that continues to show healthy demand and stability. After a period of tighter supply, the increase in available listings compared to last year is creating more balanced conditions for everyone in the market — more choice for buyers and steady opportunity for sellers.” 

Between September and October, the average home price in Edmonton chilled by $4,900, to $412,100, and the required income dropped by $940, placing the city in third in terms of improved affordability.

The Canadian cities where affordability worsened

While the majority of Canada’s major urban markets saw affordability improve, with prices down in 10 of the 13 cities, that wasn’t the case for Montreal, Halifax, and Fredericton. The overarching theme for all of these markets is that sales have remained buoyant, as average home prices are still well aligned with incomes. All three cities have a home price below the $600,000 mark, which has helped support consistent buyer demand.

How much mortgage can you afford? How much house can you buy?

Ratehub.ca’s monthly affordability report offers a snapshot of how home prices and shifting borrowing costs impact real estate purchasing power in markets across Canada on a monthly basis. The study factors in the numbers based on home price data, as well as any changes to mortgage rates and the mortgage stress test. You can determine your own affordability by checking out the MoneySense mortgage affordability calculator.

What’s next for Canadian borrowing costs and home affordability?

Borrowers have enjoyed a break on interest rates in recent months; the Bank of Canada cut its rate twice this fall by a total of 50 basis points, bringing its benchmark rate down to 2.25% – a low not seen since 2022. But it appears that’ll be it for the time being; in its most recent rate announcement on October 29, the Bank’s Governing Council stated in a release that they feel current monetary policy is “about right” to support the economy, and current pace of inflation growth.

This benchmark rate – also called the overnight lending rate – is used by consumer lenders when setting their prime rates, which is what variable borrowing products are in turn based on. This means variable mortgage rates likely won’t decrease in the foreseeable future, unless the economy shows new signs of distress.

Conditions are less predictable for fixed mortgage rates, however, as the pricing for these are based on bond yields—and these react to a whole slew of market factors, and largely what’s happening economically south of the border. Currently, one of Canada’s benchmark yields—the Government of Canada 5-year yield, which lenders use to price their five-year fixed mortgage rates—has dropped to the 2.6% range, after hovering near 2.8% in recent weeks. This is largely in response to a growing likelihood that the US Federal Reserve will cut its own interest rate in December. This has an impact on Canadian markets, even as our own central bank appears to be entering a holding pattern, and could set the stage for lower fixed rates.

The takeaway for anyone shopping for a home or coming up for renewal on their mortgage is that the rate scenario can shift suddenly. The rates currently available on the market—3.45% for a five-year variable and 3.79% for a five-year fixed—are some of the best seen in years. It’s a great move to take out a rate hold or receive a full pre-approval from a lender in order to secure access to this pricing, often up to 120 days. Should rates move higher during this time frame, you’ll be protected, while still having access to the lowest available option should they drop.

Read more about mortgages:

• Find the best mortgage rates in Canada
• Renewing your mortgage? A guide for Canadians
• The best 5-year fixed mortgage rates in Canada
• Why are mortgages so expensive in Canada?

The post How much income do you need to buy a home in Canada? A look at housing affordability in October 2025 appeared first on MoneySense.