How the Global Tariff War Could Impact Ontario’s Mortgage Market

Market Analysis

Apr 13

Right now, it’s not just interest rates or inflation you need to watch — it’s also global trade tensions. The ongoing tariff battle between the U.S. and major trading partners like China, the EU, and even Canada is creating serious ripple effects across the economy. As a mortgage agent, I’m keeping a close eye on how this might influence mortgage lending in Ontario.

Spoiler: We could be entering a more cautious, credit-tightening phase.

A Quick Recap on the Tariff Situation

Tariffs are essentially taxes on imported goods — and when major economies start raising those taxes on each other, it can spark a domino effect:

Costs go up for businesses that rely on foreign materials (think steel, aluminum, electronics, farming equipment).
Production slows down, which can lead to layoffs or income instability.
Investor confidence drops, and lenders become more risk-averse.

This is already starting to play out in Canada. Just last week, BMO tightened its mortgage lending rules for self-employed workers in tariff-exposed industries — like construction, farming, and manufacturing. And while this is just one bank, it might be a preview of what’s to come.

What Could Happen Next in the Mortgage Market?

If the tariff situation worsens or lingers, here’s what I think we might see in the Ontario mortgage space over the coming months:

1. More Cautious Lending

Banks may start reassessing how much risk they’re willing to take on — especially with self-employed or variable-income borrowers. We could see:

Stricter qualification criteria
Lower credit limits
Fewer promotional rates for “non-traditional” applicants

2. Stagnant or Slightly Falling Interest Rates

The Bank of Canada may hesitate to raise interest rates aggressively while global trade uncertainty threatens economic stability. If tariffs trigger a slowdown, we could see:

The central bank holding or even cutting rates
Fixed rates dropping slightly, depending on bond market reactions
Variable-rate borrowers getting some breathing room

3. A Cooling Real Estate Market

While housing demand in Ontario is still strong, economic uncertainty could lead to a more balanced — or even slower — market:

Buyers may delay major purchases, hoping for lower prices
Sellers may lower expectations, especially in higher-risk or oversupplied areas
Investors might sit on the sidelines until the fog clears

What This Means for You

If you’re looking to buy, refinance, or renew, now is a good time to reassess your position. While low rates may stick around a bit longer, access to credit could tighten — especially if your income isn’t salaried or if you’re in a tariff-exposed industry.

I’m Here to Help You Navigate This

As a mortgage agent, my job is to help you adapt to the market — no matter how unpredictable it gets. I work with a wide network of lenders across Ontario, including many who understand the challenges faced by self-employed borrowers, business owners, and investors.

Whether you’re planning ahead or need to act fast, I can guide you toward options that work for you — not just what the banks are offering.

📩 Have questions about where rates are going or how your income might be viewed?

Let’s talk. The earlier we plan, the more flexibility you’ll have when it’s time to make a move. Contact me using this link or simply call us at ‭+1 (647) 554-2718‬ or text us at the same number (tap to text: +1 (647) 554-2718)‬.

Tashfin Awal