06:17 AM EDT, 09/19/2025 (MT Newswires) -- Bank of Montreal (BMO) said Canada's soft housing market continues to weigh on residential mortgage credit growth.

Growth is running at 4.8% year over year but slowed to a 2.5% annualized pace in the latest month, the bank noted.

Sluggish sales volumes and lower prices are likely restraining overall growth, BMO said. At the same time, a wave of renewals at higher mortgage rates, while manageable, is limiting household flexibility, including the ability to buy investment properties.

Further Bank of Canada rate cuts that bring mortgage rates into the mid-3% range could begin to firm housing activity and mortgage growth, but that may not happen until next spring, the bank said.