For the past few years, one invisible force has quietly constrained housing inventory: homeowners who locked in ultra-low mortgage rates didn’t want to move—and replace that cheap financing with a much higher rate. Economists often refer to this as the mortgage lock-in effect.

Now, that pressure appears to be loosening. As more borrowers renew or refinance into today’s rate environment, the number of owners “stuck” with unusually low mortgage payments gradually declines. And when lock-in fades, mobility tends to rise—more people list, more people shop, and the market can function with less friction.

What this could mean for Toronto and the GTA

Toronto isn’t the U.S., but the behaviour pattern is similar: when rates rise quickly, people delay upsizing, downsizing, and relocating. That reduces listings and keeps buyers fighting over a smaller pool of options.

If lock-in continues to ease, it can translate into more resale supply and a healthier flow of transactions—without needing a sudden “boom.” The shift is usually gradual, and neighborhood conditions can vary widely across the GTA.

Why easing lock-in doesn’t instantly “fix” affordability

• Monthly payments still dominate decisions: even small rate changes can move affordability more than price changes.
• New construction constraints remain: costs and timelines can limit how quickly fresh inventory arrives.
• Life events drive selling (slowly): many owners list only when they must, so inventory often improves in waves.

Practical takeaways for buyers

1. Track listings locally: inventory changes show up in specific areas first, not across the whole city at once.
2. Shop the payment: focus on the all-in monthly cost (mortgage + taxes + condo fees + utilities).
3. Negotiate beyond price: conditions, closing dates, and inclusions can create real value.

Practical takeaways for sellers

1. Price to today’s buyer: buyers are rate-sensitive and comparison-shopping hard.
2. Presentation matters more: staging, repairs, and photos reduce “days on market” risk.
3. Plan your next step early: if you’re buying again, map financing and timing before listing.