Sweet-spot mortgage terms and 2025 predictions: Canadian real estate news for July 22

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Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

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Mortgage rates today range from bad to horrible, but there is a sweet spot

The cheapest mortgage rates today are for a fixed term of five years, but who wants to lock in for five years when rates are thought to be peaking, asks Rob Carrick. One-year mortgages make sense strategically because renewing in 12 months could let you tap into those lower rates, but the premium you’ll pay for having that opportunity is huge. Is there a sweet spot compromise between the two?

Why some mortgage renewal payments could rise into 2025 even with rates projected to drop

Desjardins’s models currently forecast an increase in variable-rate payments for people renewing in 2025-26, writes Robert McLister in his weekly column. That figure is based on the expectation that the Bank of Canada will drop interest rates by 2.75 percentage points by 2025.

But why are variable-rate payments set to increase so much if interest rates are projected to drop? The reason is that many payment hikes could be a result of borrowers paying off less principal to keep payments fixed in today’s high-interest climate.

This week’s lowest available mortgage rates

Canada’s leading nationally advertised rates barely moved in the last week. That’s a welcome development after the average Canadian mortgage rate surged 74 basis points in the past two months, writes McLister.

Is Canada’s approach to housing bad for our productivity?

Canada’s poor labour productivity is in the news these days, but there are few better places to start than with the country’s approach to housing, writes John Rapley in a column this week. When housing is a great investment, it can be a symptom of a sick economy, he writes. Additionally, everything from commute times to traffic or public transit has an impact on it.

Home of the week: A Toronto Forest Hill home

77 Forest Hill Rd., Toronto

Inside this 4,660-square-foot home, the living room has an oak floor, a wood-burning fireplace and a bay window overlooking the front garden. The formal dining room has a fireplace, oak floor and French doors leading to the conservatory.

On the second floor, a library has wall-to-wall bookshelves and cabinets, a recessed area for a desk and a fireplace with a surround of arts and crafts tiles. The house has four bedrooms, a recreation room, a sauna and a large laundry room.