Interest rates are one of the most critical factors impacting real estate investments. For investors in Ontario, understanding how the Bank of Canada’s monetary policies affect borrowing costs, property valuations, and investment strategies is essential. As of 2025, the Bank of Canada has maintained interest rates at elevated levels to combat inflation, resulting in higher mortgage rates for traditional buyers.
While this has slowed conventional MLS property sales, it has created opportunities in the off-market wholesale property sector. Investors are increasingly turning to wholesalers like SLG Property Deals to secure properties quickly, at competitive prices, and without the competition seen in traditional listings.
The Current Interest Rate Landscape in Ontario
The Bank of Canada’s key interest rate currently sits at 5.25%, up from just 1% in early 2022. This increase has made borrowing more expensive for both homeowners and investors. Higher interest rates mean higher monthly payments for financed purchases, increasing the financial pressure on investors using traditional mortgage financing.
Chart Suggestion: Interest rate trends in Canada over the past 5 years, showing the sharp increase from 2022 to 2025.
Impact on MLS Sales:
- February 2025: Ontario home sales were down 26.7% year-over-year, a steep decline compared to the 10-year average.
- Average home prices fell by 3–5%, reflecting softer buyer demand.
Investors who pivot to off-market wholesale properties can bypass these challenges by negotiating cash deals and avoiding the financial strain of high mortgage rates.
Why Off-Market Properties Are Ideal Now
Off-market deals offer several advantages in a high-interest environment:
- Less Competition: Properties are not listed on MLS, so investors avoid bidding wars.
- Faster Closings: Cash purchases can close in days to weeks, reducing holding costs.
- Better ROI Potential: Acquiring a property below market value increases profit margins, even when financing costs are high.
Case Study: In Hamilton, an investor purchased an off-market property in March 2025 for $450,000. After a $60,000 renovation, the home sold for $575,000, generating a 20% ROI in under six months. This is a clear example of how off-market wholesale properties provide opportunities that traditional MLS listings may not.
Chart Suggestion: ROI comparison between MLS purchases and off-market purchases under current interest rates.
Investment Strategies for High-Rate Markets
Investors should adapt to the high-rate environment with these strategies:
- Focus on Cash Deals: Cash eliminates financing costs and allows for faster acquisition.
- Prioritize Off-Market Properties: Access to exclusive listings through SLG Property Deals can reduce risk and increase profit potential.
- Short-Term Renovation Projects: Fast flips reduce holding costs and maximize ROI.
- Evaluate Long-Term Rental Potential: In some cases, holding the property as a rental may be more profitable than selling immediately, especially if financing is manageable.
Example: An investor purchasing a Toronto townhouse off-market with cash could save $15,000–$20,000 in interest over six months versus using a mortgage, while completing renovations faster and selling at market value.
Conclusion
Rising interest rates are challenging for traditional buyers but create unique opportunities for investors in the off-market wholesale sector. By leveraging SLG Property Deals, investors in Ontario can access exclusive properties, negotiate competitive prices, close quickly, and reduce the financial pressures associated with high borrowing costs.
For investors looking to maximize ROI and reduce market risk, off-market wholesale properties are a smarter choice in 2025’s high-interest environment.
Contact SLG Property Deals today to view our latest off-market wholesale properties and secure your next high-ROI investment before the market shifts.