Canada’s housing market isn’t being threatened by falling prices — it’s being pressured by income risk.
The federal government’s plan to eliminate 16,000 public-sector jobs over the next three years is landing at the worst possible time for homeowners. Mortgage renewals are peaking, savings are thinner, and affordability is already stretched. Now, thousands of households face a far more dangerous variable: job uncertainty.
For borrowers, this isn’t an abstract policy story. It’s a real mortgage risk event — and one that private lenders like Lendworth are already seeing ripple through Ontario.
A concentrated jobs shock in key housing markets
Ottawa–Gatineau sits at the epicentre. Nearly half of all federal workers live and own homes there, making the region uniquely exposed to public-sector layoffs.
Prime Minister Mark Carney’s first budget committed to shrinking the federal workforce to 333,000 positions by 2029, roughly 40,000 fewer than its 2024 peak. Departments already affected include Health Canada, Immigration, the CRA, Transport Canada, and Shared Services Canada — with thousands of workforce adjustment notices issued.
The housing impact often starts before layoffs are finalized.
Homeowners delay upgrades. Buyers pause. Lenders tighten. Confidence drops.
Credit agencies have been clear: mortgage arrears rise when unemployment rises. Even without price declines, cash-flow stress is enough to push borrowers into trouble.
Why income risk now matters more than home values
Canadian housing has proven resilient on price — but mortgages aren’t paid with equity. They’re paid with paycheques.
Economists have long noted that entering or remaining in a weak labour market leaves long-term scars on earnings and household wealth. Research cited by TD Economics shows that job disruptions don’t just hurt today — they reduce financial stability for years.
That’s why defaults are more closely linked to employment than to modest price corrections.
And for borrowers with renewals approaching, this matters now.
Longer amortizations are hiding stress — not fixing it
To keep payments manageable, Canadians have already stretched mortgage terms to historic levels.
According to Canada Mortgage and Housing Corporation, more than 60% of new uninsured mortgages in mid-2025 carried amortizations longer than 25 years.
That works — until income changes.
Layoffs, contract work, severance gaps, or delayed re-employment turn “manageable” payments into urgent refinancing problems. This is where many borrowers hit a wall with traditional banks.
Will rate cuts save borrowers? Not fast enough
Slowing GDP growth and rising unemployment increase pressure on the Bank of Canada to cut rates. But even if rate relief comes, it often arrives after households feel the pain.
Mortgage lenders don’t wait for policy pivots. They assess risk in real time.
For homeowners facing job uncertainty, the real question isn’t “Will rates drop?”
It’s “Can I qualify if my income changes?”
This is where private lenders step in
Banks are built for stable salaries and predictable renewals. Private mortgage lenders are built for reality.
At Lendworth, we’re already helping borrowers who:
Work in government or adjacent sectors
Are between roles or negotiating severance
Need to refinance before a renewal becomes a crisis
Have strong home equity but temporary income disruption
We lend based on property value, equity, and exit strategy — not rigid job titles or stress-test formulas.
If you have equity, you still have options.
Don’t wait for a notice letter to act
The biggest mortgage mistakes happen after income changes, not before.
If you:
Work in the public sector
Are approaching renewal in 2026
Are worried about layoffs or restructuring
Need flexibility banks won’t offer
Call Lendworth before your lender calls you.
Early action means more leverage, better terms, and far fewer bad choices.
📞 Speak with a mortgage expert today
🌐 Flexible private mortgages across Ontario
⚡ Fast approvals based on equity — not uncertainty
Your home is still an asset.
Make sure your mortgage strategy treats it that way.