What Canada’s Job Gains Really Mean for Ontario Mortgage Rates in 2025

Canada’s latest jobs report just shook up the mortgage conversation.

After losing more than 65,000 jobs in August, the economy bounced back in September with over 60,000 new positions — the kind of quick recovery chiropractors would appreciate. But before we celebrate too hard, the details matter, especially if you’re watching Ontario mortgage rates heading into 2025.

The Good News: Strong Full-Time Job Growth

This rebound wasn’t fluff. Most of the gains came from full-time jobs for Canadians 25 and older — the group most likely to qualify for mortgages. Roughly 105,000 full-time positions were added, reversing August’s loss and signaling real momentum.

Even manufacturing, which had been on the ropes, added nearly 28,000 jobs. That’s a positive sign for the broader economy — and by extension, housing demand.

When more people are working stable, full-time jobs, confidence in the housing market strengthens. It doesn’t automatically mean rates will rise, but it does give the Bank of Canada a reason to stay cautious about cutting too soon.

The Catch: Why Unemployment Stayed the Same

Here’s the twist — even with strong job creation, the unemployment rate didn’t budge. It held steady at 7.1%.

Why? Because the number of Canadians looking for work grew even faster. The labour force expanded by about 72,000 people, which kept the unemployment rate from dropping. In other words, the job market is healing, but it’s not sprinting.

And wages? Still steady at 3.6% annual growth. That’s healthy but not hot — a sign inflation pressures may be cooling, which could still open the door for lower Ontario mortgage rates in 2025, just not immediately.

What This Means for Mortgage Rates

Before this report, most analysts expected the Bank of Canada to deliver at least one more rate cut. After these numbers, those odds fell from roughly 70% to around 50%.

In plain language: a stronger job market means the Bank can take its time lowering rates. Many economists still see one final cut ahead — likely bringing the overnight rate down to about 2.25% — but it may come later than borrowers hoped.

Meanwhile, Canada’s five-year bond yield (a key driver of fixed mortgage rates) jumped slightly after the jobs data but remains under pressure from U.S. markets. Translation: fixed rates might wobble a bit, but we’re unlikely to see major drops overnight.

The Bottom Line

This was a solid jobs report — proof the economy still has life. But it also means the path to lower Ontario mortgage rates in 2025 might be slower than many expected.

If you’re thinking about a purchase, renewal, or refinance, don’t wait for the “perfect” rate. Focus on building a mortgage strategy that fits your real life, not just the headlines.

Let’s review your numbers and see what’s possible.  We’ll help you make your mortgage work smarter — not harder.