Buying or renting in 2025: What to do?

In 2025, the decision to buy a house or to stay renting is influenced by various economic, financial and personal factors. Here is an overview of the key aspects to consider in order to make the best choice.

1. Evolution of Interest Rates

Economic forecasts for 2025 indicate a potential drop in interest rates, with a target for the policy rate around 2.25%. A rate reduction can make mortgages more affordable and attract new buyers to the market.

2. Extended Cost of a Mortgage

Although interest rates could fall, the amortization on long-term mortgages, such as 30-year mortgages, could temporarily ease monthly payments. This can be advantageous for some buyers, notably those who purchase a newly built first home.

3. Personal Factors

Before buying, it is crucial to assess your financial stability: consider your income, debts, and your ability to bear the variable costs associated with home ownership, such as maintenance, property tax and insurance.

4. Real Estate Market Conditions

With a significant share of Canadian mortgages coming due, pressure could rise for borrowers, causing fluctuations in housing prices. Entering the home-buying market requires an analysis of the specific dynamics of the local market.

5. Renting Options Pros vs. Cons

Staying a renter offers flexibility and avoids the burden of unexpected housing maintenance costs. Nevertheless, renting can become costly depending on how rents evolve, especially in cities where demand is strong.

Conclusion

To know whether it is more advantageous to buy or rent in 2025, evaluate your personal financial situation, monitor trends in interest rates and real estate prices, and consider how long you plan to stay in a home. Each choice comes with its own risks and benefits; it is essential to act according to your own goals and personal circumstances.