How June’s Interest Rates Could Affect Your Home Purchase – Key Insights for Buyers in 2025

With the 2025 real estate market in full swing, June’s interest rates are top of mind for many homebuyers. Whether you're a first-time buyer or a seasoned investor, even a small change in mortgage rates can significantly affect your purchasing power, affordability, and long-term costs.

So what’s really going on with interest rates this June? And how should it influence your strategy when buying a home?

Let’s break down what you need to know about interest rate trends, market reactions, and financing tips to help you make informed decisions in this fast-moving environment.

Where Are Interest Rates in June 2025?

As of June 2025, the Bank of Canada has held interest rates steady following a gradual cooling cycle after the highs of 2023–2024. Fixed mortgage rates have moderated, while variable-rate options remain attractive for some buyers banking on future cuts.

Here’s a quick look at current rate trends:

• 🏦 5-year fixed mortgage rates: ~4.59% to 5.09% (depending on lender and credit strength)

• 📉 Variable rates: Often slightly lower than fixed, but sensitive to rate adjustments

• 🔁 Stress test benchmark: Still in place, requiring buyers to qualify at ~2% above contract rate

While not at historic lows, today’s rates offer more predictability and stability than the volatile climbs of recent years. This shift creates opportunities for strategic buyers—especially those who understand how rates affect monthly payments and approval potential.

How Interest Rates Affect Your Home Purchase

1. Your Buying Power

The most direct impact of rising or falling rates is on how much you can afford to borrow. Even a 0.25% difference in your mortgage rate can affect your budget by tens of thousands of dollars.

For example:

• At a 5% interest rate, a $700,000 mortgage may cost ~$4,075/month

• At 4.5%, that same mortgage would drop to ~$3,870/month

• That’s a $2,460/year difference just from a half-point change

📌 Tip: Lock in a rate with your lender early if you're actively searching. Most lenders will offer a 90- to 120-day rate hold.

2. Qualifying for a Mortgage

Because of Canada’s mortgage stress test, you must qualify at a higher rate than your actual loan. In June 2025, that’s often 6.5% or higher depending on the lender. As rates go up, some buyers find themselves qualifying for smaller loan amounts—which can reduce their property options.

📌 Tip: Work with a mortgage broker to explore alternative lenders or tailored products if your affordability is tight. Not all banks offer the same solutions.

3. Negotiating Power with Sellers

When rates rise, buyer demand often cools slightly—especially among rate-sensitive segments like first-time buyers. This gives active buyers more room to negotiate on price, closing costs, or conditions.

In some Ontario markets, including Hamilton, Burlington, and Milton, we’re already seeing sellers become more flexible as rates and affordability challenges linger.

📌 Tip: If you’re well-prepared with a pre-approval and flexible on closing, you may be in a stronger position than you think—especially if competing buyers have paused their search due to rate concerns.

Should You Buy Now or Wait?

It’s the age-old question: Buy now, or wait for rates to drop?

Here’s how to think about it:

✅ Buy Now If:

• You’ve found a home that fits your lifestyle and budget

• You’re financially stable with a rate you can lock in confidently

• You want to build equity and aren’t overly concerned with short-term fluctuations

⏳ Consider Waiting If:

• You’re relying heavily on variable rates and expect cuts soon

• You’re priced out of your desired market under today’s rates

• Your employment or financial situation may improve in a few months

That said, remember: you can always refinance later. The saying “marry the house, date the rate” applies—lock in the property, and optimize your rate when the market shifts.

What Lenders Look for in June 2025

In a rate-conscious market, lenders are especially focused on:

• 📊 Debt-to-Income Ratios – Keep credit card and loan balances low

• 🏦 Stable Income & Employment – Consistent work history helps

• 🧾 Down Payment Strength – 20%+ down payments may unlock better rates

• 💳 Credit Score – Higher scores mean more lender options and better pricing

📌 Tip: Aim for a credit score above 680 to access prime rates. A score above 740 opens the door to preferred lenders and lower premiums.

Local Market Watch: Ontario Buyers Take Note

In the Halton Region, Hamilton, and the west GTA, buyer activity is steady but more strategic. Homes priced appropriately are selling well, but those priced too aggressively are sitting longer—creating space for buyers who are prepared and financially pre-approved.

If you're considering a move to Acton, Georgetown, Oakville, or Mississauga, June offers a chance to leverage the market shift caused by rate sensitivity while still accessing desirable properties.

Final Thoughts: Be Informed, Be Prepared

June’s interest rates may not be the lowest in history—but they offer more stability and predictability than we've seen in years. Whether you're buying your first home, upgrading, or investing, understanding how rates affect your bottom line is key to a smart purchase.

With expert advice, strong financing, and the right strategy, June can be a powerful time to buy—especially for informed, prepared buyers.

Let’s Talk About Your Mortgage Strategy

At Ana Bastas Realty, we’ve helped buyers across Halton Hills, Oakville, Burlington, Mississauga, Hamilton, and the GTA navigate interest rate shifts and secure homes with confidence.

Let’s review your goals, connect you with trusted mortgage pros, and make sure you're positioned for success in this market.

📞 Call/Text: 647.938.8814
🌐 www.anabastas.ca
📍 Serving the GTA Since 2012 | ABR | SRS | SRES | RENE Certified