After months of rising costs and slowed activity, the Bank of Canada has finally started to ease interest rates. For Toronto’s housing market, this shift is more than a headline—it’s a signal. A potential turning point.

The question now is: will interest rate cuts actually improve housing affordability in Toronto?

What Lower Interest Rates Mean for Buyers

When rates drop, mortgage payments get cheaper. That’s the obvious benefit. For many buyers who were previously priced out, even a small rate cut can reopen the door to ownership.

For example, a 0.5% drop on a $700,000 mortgage can reduce monthly payments by around $200. That can make the difference between stretching too thin and comfortably affording a home.

But rate cuts also have a flip side: they increase demand. More buyers re-enter the market, which can drive up prices again. So while monthly payments might be lower, competition could heat up, especially in high-demand areas across the GTA.

What It Means for Different Buyer Profiles

First-time buyers often benefit most from lower rates. A slight drop in monthly costs can push affordability into reach, especially with additional help from programs like the First-Time Home Buyer Incentive.

Move-up buyers, on the other hand, might still face affordability pressures if their current home hasn’t appreciated enough to cover rising property values. Investors may jump in fast, seeing a rare window for both capital appreciation and improved cash flow on rentals.

Will Prices Start Climbing Again?

That depends. If sellers flood the market and listings rise, prices might stay relatively stable. But if supply stays tight and demand spikes, bidding wars could return.

Toronto has long struggled with a supply shortage. Rate cuts don’t build homes—they just bring more buyers back into the picture. So unless there’s a surge in new inventory, upward pressure on prices is likely.

Affordability is more than just mortgage payments. It’s about total cost, including down payments, property taxes, and maintenance. Lower rates help, but if home prices start climbing again, the net benefit could shrink.

A Window of Opportunity

Right now, there’s a short-term opening. Rates are easing, but prices haven’t surged—yet. That gives well-prepared buyers a chance to move before the market heats up.

At Justo, we’re helping buyers make smart moves while conditions are still in their favour. Our cashback model gives clients up to 50% of the buyer agent commission back, which can translate into thousands in savings. That cash can go toward closing costs or boosting your down payment.

With less competition and cheaper borrowing, it’s a rare moment of balance in Toronto real estate.

How Sellers Should Respond

If you’re thinking about selling, this is a key moment to prepare. Rate cuts usually bring more buyers into the market within a few months. Listing before the rush could help you stand out.

Justo offers services that make listings pop: free staging consultations, 3D virtual tours, and targeted social media campaigns. We also offer a more affordable commission structure that helps you keep more of your home’s value.

The takeaway? Sellers don’t need to wait. Acting early could actually mean better results.

How Rate Cuts Affect Different Neighbourhoods

Neighbourhoods on the edges of Toronto or in the 905 areas may feel the effects of rate cuts more strongly. With borrowing costs down, more buyers are willing to consider longer commutes for more space or better prices. This could boost activity in Mississauga, Brampton, Oshawa, and surrounding areas.

In the city core, demand is already high, and lower rates could intensify competition for condos and townhomes. But with more people returning to offices or seeking urban convenience, the downtown market could heat up again.

Risks and Red Flags

Buyers shouldn’t rush in blindly. A drop in rates can create urgency, but it’s still critical to do the math. If rates continue to fall, fixed-rate mortgages today could be more expensive than what’s available a few months from now. On the other hand, if rates bounce back, variable-rate holders could get caught.

It’s also worth watching the broader economy. If rate cuts are responding to weaker economic growth or job loss, affordability could improve on paper but worsen in reality.

Big Picture: Affordability Still Needs Policy Help

While rate cuts can ease some pressure, they’re not a complete fix. Toronto’s affordability issues go deeper. Lack of supply, zoning challenges, and high land costs all play a role.

To truly improve housing affordability, governments need to support faster housing development and smarter urban planning. Incentivizing multi-family builds, easing permit timelines, and converting unused commercial space into residential could help.

But in the short term, rate cuts are at least giving people some breathing room.

What Justo Recommends

• For buyers: Get pre-approved now and lock in rates if you’re ready. Use the cashback to increase your flexibility and lower your upfront burden.
• For sellers: Invest in making your home market-ready. Buyers are price-sensitive, and small improvements can go a long way.
• For investors: Be cautious. Look for properties with strong rental potential and solid fundamentals.

Our team at Justo has worked with hundreds of buyers and sellers through all types of markets. We know how to position our clients for success—with real savings, practical advice, and expert support every step of the way.

Making the Most of a Shifting Market

Interest rate cuts are creating new possibilities in Toronto’s housing market. They’re not a silver bullet, but they are shifting the balance back toward buyers—at least for now.

If you’ve been waiting for a sign, this could be it. Whether you’re planning to buy your first home, make a strategic move, or sell while demand builds, acting sooner rather than later could work in your favour.

With Justo, you get more than an agent. You get a team that saves you money, supports your goals, and understands Toronto real estate inside out.

Let’s talk about how you can make the most of this moment. Contact us today.