What This Means for Mortgages, Housing, and Your Wallet
The Liberals are back—again.
After a closely watched federal election, the Liberal Party has secured a fourth consecutive term, this time under new leadership. With Mark Carney at the helm and a minority government in place, Canadians are bracing for yet another wave of promises to fix housing, boost affordability, and steer the economy away from a downturn.
But what does this really mean for mortgage rates, refinancing decisions, and homeownership in Canada?
Whether you’re a homeowner, a buyer on the sidelines, or someone drowning in high-interest debt, this isn’t just political noise—it could directly affect your next mortgage payment or refinance strategy.
Carney’s Liberal Agenda: Big Spending, Bigger Deficits
The new Liberal platform includes $77 billion in new fiscal stimulus over the next four years, according to Oxford Economics. The spending will be directed at infrastructure, housing, tax cuts, and defence. The federal deficit is projected to hit $62.3 billion in 2025–26.
What this means for you:
More government spending could fuel inflation, putting pressure on the Bank of Canada to delay rate cuts.
Some modest rate drops are still expected—BMO forecasts a 0.75% cut by year-end—but don’t expect aggressive slashing.
Takeaway: If you’re waiting for significant rate cuts to refinance, be prepared for a slow, cautious shift.
Mortgage Strategy in a High-Deficit, High-Debt Climate
If you’re juggling credit card debt, personal loans, or multiple payments, now is the time to explore if your mortgage can help simplify your financial life.
Refinance to Pay Off Debt
Using home equity to consolidate debt at a lower rate can:
Lower monthly payments
Eliminate high-interest credit card balances
Reduce financial stress
But caution: You’re converting unsecured debt into secured debt. That means your home is at risk if you can’t keep up with payments.
Always consult a licensed mortgage agent to assess the risks and see if refinancing is right for your situation.
Housing Affordability: The Good, the Gimmicky, and the Wait-and-See
Despite years of promises, affordability is still out of reach for many Canadians. Here’s what the Liberals are proposing:
Remove GST on new homes under $1M for first-time buyers
Unlock $25 billion in financing for affordable housing builds
Roll back capital gains tax increases (a win for investors and homeowners)
These measures may offer small wins, but won’t dramatically change affordability in the short term—especially in major urban markets.
Market Reaction: Quiet—for Now
Despite the big spending, financial markets were relatively calm:
The Canadian dollar and bond yields saw little movement.
Investors are waiting for the federal budget and trade developments with the U.S.
The real impacts are still coming—and will depend on policy execution, housing supply measures, and rate direction.
What Homeowners and Buyers Should Do Now
Here’s how to act smart in a high-deficit, uncertain-rate environment:
1. Consider Refinancing to Pay Off Debt (Cautiously)
If you’ve built equity and are burdened by high-interest debt, refinancing might help—but only if your income is stable and your budget allows for it.
Explore options with a licensed professional:
Home equity loans
Second mortgages
HELOCs
2. Don’t Rely on Rate Cuts Alone
Modest cuts may come, but don’t bet your entire strategy on them. Make plans based on today’s numbers, not hopeful forecasts.
3. Focus on What You Can Control
Budgeting, debt management, and financial discipline will matter more than political headlines. Build your financial strategy based on your actual income and expenses.
A Final Word for Canadians Feeling Fed Up
We get it—housing is still unaffordable, wages haven’t kept up, and mortgage payments are stretching budgets thin.
But here’s what hasn’t changed: you have options.
With the right support and smart use of home equity, refinancing can give you breathing room, lower interest costs, and restore financial stability. Just make sure your plan is based on reality—not campaign promises.
For help professional guidance financial future contact us today.
Sources
The Globe and Mail: “Five ways a Liberal election win will influence mortgage rates, housing”
Canadian Mortgage Trends: “Liberal election win: What it means for Canada’s policies and economy”
Oxford Economics and BMO Capital Markets, via media commentary
