House Prices Still Falling in 2026: What Ontario Homeowners Should Do Right Now

I have a client, let's call her Sandra. She refinanced her Richmond Hill home back in 2022, when prices were near their peak and she was able to consolidate debt into her mortgage. She locked in at a comfortable rate and monthly payment, felt good about her equity cushion, and moved on with her life. Now she's watching the market soften and wondering if that cushion is quietly getting thinner. She wanted to know: should she do something, or just wait it out?

Honestly? That question is exactly the right one to be asking right now.

CMHC, Canada's national mortgage insurer, is projecting continued house price softening through the remainder of 2026. Now, I don't take any government forecast as gospel, and neither should you. But here's the thing: you don't have to believe the projection to act on its logic. Even a reasonable probability of further softening changes the math for homeowners who refinanced or purchased at peak valuations.

Your 2021 or 2022 Equity Cushion Is Not What It Was

If you bought or refinanced when prices were elevated, your original loan-to-value ratio was calculated against a number that may no longer exist. That matters more than most people realize.

Here's what most people miss: lenders don't care what you paid. They care what your property is worth today. If values have dipped in your neighbourhood, your effective LTV has crept upward, even if you haven't touched the mortgage. That shifts your options. It narrows what you can access. And it can determine whether you qualify for a conventional refinance the next time you need one.

The homeowners sitting on the most risk right now are the ones who refinanced at the top, feel fine because payments are manageable, and haven't looked at the actual equity number in two years. Comfortable is not the same as safe. For most bank customers, this does not mean too much as of yet, but for those whose loans are with B lenders or private lenders, it could mean a non-renewal.

A Small Penalty Today Could Beat a Worse Position Tomorrow

This is the conversation most mortgage agents won't start unless you do. If prices continue to soften through 2026, as CMHC projects, your window to refinance from a position of genuine strength may be narrowing. Not closing. Narrowing.

Breaking your current mortgage early carries a prepayment penalty, no question. But consider the alternative: if property values decline further and your LTV tightens, your ability to access equity shrinks with it. A refinance you could do comfortably today might require a co-signer, a second mortgage, or a much smaller draw six months from now.

I'm not telling you to refinance. I'm telling you to run the numbers before the market runs them for you.

Tapping Equity Before You Need It Is a Power Move, Not a Panic Move

There's a version of this that's purely defensive. You're not planning a renovation, you don't need cash flow help, your mortgage is fine. But you're sitting on equity that is, right now, accessible within bank or other lenders' requirements. Setting up a refinance or a secured line while that equity exists gives you optionality. Something to draw on if rates shift, if a job changes, if a family situation emerges.

Getting access to capital when you don't desperately need it is very different from scrambling for it when you do. Lenders, both institutional and private, respond to borrower position. The borrower with stronger equity asking to pull out a modest amount gets a completely different conversation than the borrower whose equity has been compressed after prices have dipped.

If you're going to use equity, use it from a position of strength. That window exists today. Whether it exists in the same form twelve months from now is the honest uncertainty.

The Flat Market Scenario Is Just as Costly as the Declining One

People fixate on price drops. The scenario they underestimate is flat. Two or three years of sideways prices, after you refinanced at the peak, means your equity sits still while your mortgage amortizes slowly. You're not building the cushion back. You're just waiting.

If your plan was to use equity in the next few years, whether for a kid's education, a property purchase, a business, or just financial flexibility, a flat market is almost as frustrating as a declining one. You're stuck at a number that doesn't move, and every year that passes narrows the gap between what the lender will offer and what you actually need.

Acting now, before flat becomes the new story, is its own kind of smart. This isn't about calling a bottom. It's about not assuming the top lasts forever when CMHC is telling you, plainly, that it projects further price decreases for the remainder of the year.

What You Should Actually Do Before the End of This Year

I'm going to make this concrete, because vague advice is just noise.

First, get a current market evaluation on your property. Not your 2022 purchase price. Not what Zolo says. A real comparable-sales assessment, ideally from someone who works in your specific area and knows the streets. In Richmond Hill, Barrie, or Mississauga, micro-neighbourhoods can move very differently. You need your actual number.

Second, pull your current mortgage statement and calculate where you actually sit on LTV. If you're already north of 75 to 80 percent, your options through conventional channels are thinning. If you're below that, you may have room, and now is the time to understand what it's worth to you.

Third, have someone run the penalty math. Prepayment penalties on fixed mortgages are often less dramatic than people assume, especially if you're partway through your term. You won't know until you ask, and not asking is the most expensive decision.

Fourth, and most important: don't wait for a sign that the market has bottomed. That bell never rings. The only question is whether your position today gives you choices. If it does, make a plan. If it doesn't, find out why, and what it would take to fix it.

The Bottom Line

CMHC is projecting continued softening through 2026. You can debate the forecast. But if there is even a reasonable chance they're right, and housing continues to drift lower or sit flat, the homeowners who reviewed their equity position and took action early will be in a fundamentally different spot than those who waited for certainty that never came.

Sandra, by the way, ran the numbers. Her LTV had moved meaningfully from where it sat at refinance, closer than she expected. She wasn't in crisis. But she wasn't comfortable either. We mapped out what a refinance would cost her now versus what she'd be working with if prices softened further. The penalty made sense. She acted.

That's the whole conversation. Not panic. Not hype. Just knowing your number before the market changes it for you.

If you want to look at where you actually stand, I'm happy to walk through it with you. No pitch, no pressure. Just a straight conversation.

David Steinfeld, Stonefield Capital, Richmond Hill
stonefieldcapital.ca | 416-371-2077