As we turn the page on yet another tumultuous year headlined by rising interest rates and falling home prices, we wanted to take a look back at some of the top mortgage-related stories of 2022 and how mortgage rates fared.
Consumers grappled with rising prices in all nearly all aspects of the economy thanks to soaring inflation. But new homebuyers did get a reprieve when it came to Canadian real estate prices, which fell after reaching an all-time high earlier in the year. As of November, the average unadjusted price fell to $632,802, down 12% year-over-year and 22.5% below February’s price peak.
On the other hand, borrowers had to deal with soaring interest rates, which slowed mortgage borrowing as non-mortgage debt grew.
Here’s an overview of some of the year’s top themes, rate movements and mortgage-related stock performance.
The foundation for variable interest rates is the Bank of Canada’s overnight rate and prime rate, which both finished the year 400 basis points higher than where they began.
Meanwhile, the most important benchmark for fixed-rate pricing—the 5-year government bond—ended the year up over 200 basis points, which resulted in significantly higher fixed mortgage rates by year-end.
| Indicator | Year end | 2022 change |
| BoC overnight rate | 4.25% | +400 bps |
| Prime rate | 6.45% | +400 bps |
| Avg. 5-yr fixed rate on new insured mortgages1 | 4.79% | +227 bps |
| Avg. variable rate on new insured mortgages1 | 5.35% | +388 bps |
| 5-yr Posted Rate | 6.49% | +170 bps |
| Min. Qualifying Rate (MQR) |
5.25% | No change |
| 5-yr government bond yield | 3.42% | +217 bps |
And finally, here’s a look at the performance of Canada’s big banks and public companies that make the majority of their revenue in the mortgage business.
1 Source: Bank of Canada via Statistics Canada, as of October 2022.
