Canada Inflation Update – November 2025: What It Means for Ontario Mortgage Rates & Home Buyers

If you are planning to buy a home, refinance, or renew your mortgage in Ontario, inflation data plays a major role in your decision-making. The November 2025 Consumer Price Index (CPI) report gives us a clearer picture of where interest rates, housing prices, and affordability may head in 2026.

Let’s break it down in simple, easy-to-understand terms, with a clear focus on Ontario homeowners and buyers.

• Lower inflation reduces the chance of interest rate hikes

• Mortgage affordability improves when rates stabilize

• Buyers and homeowners can plan with more confidence

Stable inflation reduces pressure on interest rate increases, which directly impacts today’s mortgage rate.

Prices for services rose 2.8% year over year, down from 3.2% in October, helping keep inflation under control.

Key Ontario highlights:

• Travel tour prices fell 8.2% year over year

• Traveller accommodation prices dropped sharply

  • Ontario saw a 20.2% decline

  • Last year’s spike was due to major concerts in Toronto

• Rent inflation slowed slightly to 4.7%

Lower travel and accommodation costs helped ease overall inflation, supporting a stable interest rate environment.

While inflation overall is cooling, grocery prices jumped sharply in November.

Grocery inflation in Ontario:

• +4.7% year over year (highest since December 2023)

• +1.9% month over month — largest increase since January 2023

Biggest price increases:

• Beef: +17.7%

• Coffee: +27.8%

• Fresh fruit (especially berries): +4.4%

• Prepared foods: +6.6%

Higher grocery bills reduce monthly cash flow, which can impact mortgage affordability and stress-test qualification, especially for first-time buyers.

After being the biggest driver of inflation in recent years, housing-related costs are now easing.

Shelter inflation trends:

• Owned home costs: up just 1.7% (slowest pace in almost a decade)

• Home prices: softening in many Ontario cities

• Rent: still high, but no longer accelerating

This cooling trend improves long-term affordability and creates better conditions for buyers preparing to enter the market.

Some new cost pressures are emerging:

• Electricity prices:

  • +1.5% month over month

  • +3.4% year over year

• Telephone services:

  • +11.7% year over year

  • Fastest increase since 1982

These increases can affect household budgets and should be factored into overall financial planning.

The Bank of Canada focuses closely on core inflation, which excludes food and energy.

November core inflation data:

• Bank of Canada core measures: 2.8%

• CPI excluding food and energy: 2.4%

• Monthly increase: just 0.1%

This confirms that underlying inflation pressure is easing, supporting a pause in interest rate changes.

• Average inflation for 2025: just over 2%

• Down from 2.4% in 2024

• Lowest annual inflation in five years

It’s important to note that part of this improvement came from the removal of the consumer carbon tax, which temporarily lowered inflation.

Based on current trends:

• The Bank of Canada is expected to hold rates steady through most of 2026

• No immediate rate cuts or hikes are expected

• The next rate move is more likely a rate hike, but not until late 2026

Homeowners with upcoming renewals should review their options early with a
suited to today’s stable rate environment.

The Ontario housing market remains under pressure:

• Existing home sales are weak

• Buyer confidence remains cautious

• Trade and tariff uncertainty is affecting Ontario more than other provinces

This softer market may create opportunities for
who are financially prepared.

✔ Inflation is under control
✔ Interest rates are likely to remain stable
❌ Grocery prices remain a concern
❌ Housing recovery will be gradual

For some homeowners, easing inflation and softer home prices may create the right time to
to improve cash flow or consolidate debt.

Every situation is different. Understanding inflation trends and interest rates can help you make smarter mortgage decisions.

👉 Book a free consultation with an experienced Mortgage Agent to plan your next move with confidence.