Mortgage Blog

How mortgages today compare to 35 years ago in Canada

September 9, 2025 | Posted by: Jatinderbir Singh Bajwa

“For couples in their 30s — the median age when most Canadians purchase their first home — the burden of borrowing has grown heavier despite falling interest rates and rising incomes,” the report said.

“By comparing borrowing costs across decades, one conclusion becomes unavoidable: today’s buyers face the steepest and most prolonged path to homeownership.

In 1990, the cost for an average Canadian home was $207,756. With a 20 per cent down payment of $41,551, buyers had a mortgage of $166,205.

Interest rates were high — at 13.4 per cent, making monthly payments $1,952 and taking up 41 per cent of a family’s $57,133 after-tax income, the report said.

This year, the average cost of a home is $672,784, making a 20 per cent down payment $134,557 and leaving a mortgage of $538,227.

Even with a much lower interest rate at 4.04 per cent, monthly payments are at $3,263, taking up 47 per cent of the income for a family earning $82,610 after tax, the report said.

“In effect, couples today carry mortgages three times larger than those of 1990 while dedicating a larger share of their paycheques to service them,” Zoocasa said.

“The conclusion is clear: income growth has not kept pace with home prices, and affordability has deteriorated despite lower interest rates.”

The report said that historically, lower interest rates have made home ownership more attainable, but that changed in the 2010s.

“Lower borrowing costs, once a pathway to affordability, became the very driver of price escalation,” the report said.

“Millennials and Gen Z are not enjoying the benefits of low rates, they are paying the price for them through historically large debt loads, as the cost of living increases substantially post-pandemic.”

The amount of principal that remains after five years of payments is also nearly triple what it was compared to 1990, meaning those who buy a home today “remain heavily indebted well into midlife,” the report said.

“The pace of equity accumulation, once a cornerstone of financial stability, has slowed dramatically, leaving households more exposed to market downturns and less able to leverage their homes for wealth-building.”

Zoocasa also found that in 1990, a household could save for a down payment in about 10 years at a 7.2 per cent household savings rate.

Today, despite higher incomes, it takes 22 years to save for a down payment with the same relative share.

“This shift is profound: where Boomers and Gen X could realistically purchase by their mid-30s, Millennials were forced to delay, and Gen Z faces the prospect of waiting until their 40s without external assistance,” the report said.

Overall, Boomers in the late 1980s and early ’90s had very high interest rates but bought cheaper homes, making them able to build equity quickly once rates fell, the report said.

“Gen X, entering their 30s between the late 1990s and early 2010s, benefited from falling rates that balanced rising prices,” the report said.

“Millennials in the 2010s faced record-high prices despite low borrowing costs, delaying ownership with steep down payment hurdles. Gen Z, heading into their 30s in the 2030s and 2040s, face the steepest climb yet: saving timelines over two decades, mortgage balances near half a million dollars, and slower equity growth

This data highlights how Boomers were able to save for retirement and build wealth through more affordable purchases, which is now evident in the sizable inheritances being passed down to the next generation.”

The challenges are reflected in declining home ownership rates in Canada, Zoocasa noted.
In Ontario, it fell from 71.4 per cent to 68.4 per cent over the same period.

In 2011, it was 69 per cent nationwide and fell to 66.5 per cent in 2021.

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