Mortgage payments dropping in Niagara, making it more affordable than many U.S. cities

While interest rates are still much higher than they were pre-pandemic, a new report suggests that homeowners in the Niagara region are spending a little less in 2024 than they were in 2023–all while living in homes that are overall cheaper than some found south of the border.

According to a recent report by real estate brokerage and website Zoocasa, Canada has higher home prices but more affordable mortgage payments. 

The report says that in 2023, the average monthly mortgage payment (in U.S. dollars) in Niagara was $2,176 (so about $3,006.31 Canadian dollars now). In 2024, the average monthly payment fell to $1,804 (about $2,492 now)–a decline of 16.8 per cent. 

That means that this year, Niagara-area homeowners are paying less than residents in Minneapolis ($1,999 USD a month), Chicago ($1,946), Dallas ($1,942), Atlanta ($1,924) and Philidelphia ($1,892)–just to name a few. 

The report says monthly mortgage payments in Niagara are also lower than those paid in U.S. cities such as Dever, Portland, Phoenix, Las Vegas, Baltimore and other major cities. 

That said, housing does remain more expensive. The median home price in 2024 in Niagara is $463,796 USD (so about $640,770 CAD)–higher than in Minneapolis ($398,300), Chicago ($391,100), Dallas ($391,300), Atlanta ($387,800) and Philadelphia ($381,200). 

Interestingly enough, the report says that monthly mortgage payments have also declined in those aforementioned US cities, but the declines are less pronounced than the almost 17 per cent decrease reported in Niagara. 

So, what’s behind the discrepancy? 

The report notes that the Bank of Canada has announced three interest rate cuts this year, lowering the overnight lending rate to 4.25 per cent as of early September. Meanwhile, the U.S. Federal Reserve has implemented just one rate cut, reducing rates by 50 basis points in mid-September, leaving average 30-year mortgage rates above six per cent. 

For this reason, Canada’s average five-year fixed rate has steadily decreased since the end of 2023. In the U.S., the average 30-year fixed rate rose from a low of 6.08 per cent in September to 6.32 per cent in October.

This dynamic plays out in Canada’s most expensive cities. The report says that at $905,693, Toronto has the fourth-highest home price among all 50 cities analyzed, but its average monthly mortgage payment is only the eighth highest on the list. 

In 12 of the 20 Canadian cities analyzed by Zoocasa, the average monthly mortgage payment is under $2,000. Saint John and Regina boast average monthly mortgage payments under $1,000, while Pittsburgh, the most affordable U.S. city analyzed, has an average monthly mortgage payment of $1,172. 

“This trend is also evident in mid-priced Canadian markets like Hamilton-Burlington and Kitchener-Waterloo. Both have median home prices around $600,000, yet their average monthly mortgage payments are $100 cheaper compared to Austin and Phoenix, where median home prices are $100,000 lower,” the report reads. 

Some U.S. cities also boast very high monthly mortgage rates. According to the report, homeowners in San Francisco can expect to pay about $7,190 USD a month–much more than a monthly mortgage payment of $5,702 USD in Vancouver (where, interestingly enough, the average home price is actually $16,000 higher). 

Of the 50 cities analyzed, only five have average monthly mortgage payments exceeding $4,000: San Francisco, Vancouver, San Diego, Los Angeles, and Seattle. 

“Even in markets where the American counterpart has a lower median home price, as is the case with Houston and Edmonton, the Canadian market is still more affordable for mortgage payments,” the report reads.

“Houston’s median single-family home price of $351,600 results in an average monthly mortgage payment of $1,745, while Edmonton’s median detached home price of $366,995 results in an average monthly mortgage payment of $1,428.” 

The Bank of Canada is expected to make another announcement on interest rates on Oct. 23.