If you purchased a home in London, Ontario in 2021 or early 2022, you likely paid near or at the top of one of the most dramatic price run-ups in the city's history. What comes next isn't panic — it's perspective, a clear-eyed look at your options, and a plan that works for your specific situation.

Understanding the London, Ontario Market Correction

Between 2020 and February 2022, London Ontario's average residential sale price surged from approximately $450,000 to a peak near $825,000 — an 83% increase in under two years, according to LSTAR (London & St. Thomas Association of Realtors). When the Bank of Canada began its aggressive rate-hiking cycle in March 2022, the market corrected sharply. By late 2023, average prices had fallen to approximately $580,000 — a peak-to-trough decline of roughly 26%.

As of Q1 2026, the London market has partially recovered to approximately $612,000, per LSTAR data. That means buyers who purchased at the 2022 peak are still underwater relative to their purchase price on a raw dollar basis — though the gap has been narrowing.

The first step to making a sound decision is understanding exactly where you stand. That means getting a current, accurate free home evaluation in London, Ontario from a local broker, not relying on automated online estimates which can be off by 10–15% in a volatile market.

When Holding Your London Ontario Home Is the Right Move

For the majority of peak buyers who can afford their monthly carrying costs, the most financially rational strategy is to hold. Real estate in London, Ontario has a strong long-term track record of recovery, and several structural factors support price appreciation through 2026 and beyond.

Population and Demand Fundamentals

Statistics Canada projects London's population to reach 600,000 by 2046, driven by immigration and interprovincial migration from higher-cost cities. The City of London continues to face a housing supply shortage, with building permit issuance lagging new household formation. These supply-demand dynamics create a floor beneath prices that didn't exist in previous cycles.

Rate Relief Is Supporting the Market

The Bank of Canada cut its policy rate from a peak of 5.0% in mid-2023 to 2.75% by early 2026 — a 225 basis point reduction. CREA projects this rate relief to support a 4–6% increase in national average home prices in 2026, with London expected to track or slightly outpace that trend given its relative affordability compared to Toronto and the GTA.

Time Heals Most Corrections

Historically, London Ontario has recovered from significant corrections within 5–8 years. The 1989–1991 correction took approximately 7 years to fully recover. The current correction has the advantage of strong population growth and lower base rates as tailwinds — factors that suggest a shorter recovery window. If your horizon is 5+ years and you can carry the property comfortably, time is your most powerful asset.

Strategies to Reduce Your Carrying Costs While You Hold

The biggest risk for peak buyers isn't the paper loss on their home's value — it's the monthly cash flow squeeze, especially if a mortgage renewal at higher rates is imminent. Here are the most effective strategies to reduce carrying costs and buy yourself time.

Rent Out a Portion of Your Home

London's rental vacancy rate was just 2.1% according to the CMHC 2025 Rental Market Report, and average two-bedroom rents in the city sat near $1,890/month. If your property has a basement suite, laneway unit, or spare bedroom, renting it out can offset a significant portion of your mortgage payment. Be aware that converting a principal residence partially to a rental has income tax and capital gains implications — consult an accountant before proceeding.

Extend Your Amortization at Renewal

Federal mortgage rules allow insured mortgage holders to extend their amortization period to up to 30 years at renewal, reducing monthly payments. Conventional mortgage borrowers may also have this option depending on their lender and loan-to-value ratio. While you'll pay more interest over the life of the mortgage, extending the amortization can meaningfully reduce monthly pressure while you wait for the market to recover.

Negotiate a Better Rate

With the Bank of Canada's policy rate at 2.75% as of early 2026, 5-year fixed rates have declined considerably from their 2023 peaks. Do not simply accept your existing lender's posted renewal rate — shop the market through a mortgage broker, or use the London Ontario mortgage calculator to model different rate and term scenarios before your renewal date.

Strategic Renovation to Build Equity

High-return, low-cost renovations can meaningfully narrow the gap between your purchase price and current market value. According to CMHC renovation impact data, kitchen updates, bathroom refreshes, and curb appeal improvements typically return 75–90% of renovation costs in appraised value in the London market. Focus on cosmetic improvements that attract buyers — not structural or mechanical projects that are expensive but invisible.

When Selling at a Loss Is the Right Financial Decision

Holding isn't the right move for everyone. If your financial situation has materially changed, your carrying costs are creating serious hardship, or a life event is forcing a timeline, selling proactively — even at a loss — is often far less damaging than waiting until the situation escalates into a power of sale or credit damage.

Selling at a loss feels counterintuitive, but preserving your credit, your relationships, and your ability to re-enter the market later is worth more than protecting the number on a purchase agreement signed four years ago.

Signs That Selling Is the Better Path

• Your mortgage is coming up for renewal and the new payment will be unaffordable under any realistic rate scenario.
• You have significant high-interest debt (credit cards, lines of credit) that is compounding faster than your property can recover in value.
• A life change — job relocation, separation, health issue, or family need — requires liquidity or a move within the next 12 months.
• You have already missed or are at serious risk of missing mortgage payments, which could trigger power of sale proceedings.
• The property is draining savings you need for other essential purposes (retirement, children's education, emergency fund).

A Decision Framework: Hold, Rent, or Sell?

Every homeowner's situation is different, but the following table summarizes the key decision factors and what they point toward. Use this as a starting point for your conversation with a broker and your financial advisors.

Six Steps to Take Right Now If You Bought at the London Ontario Peak

1. Get an accurate home valuation. An automated estimate won't cut it in a market that has moved this significantly. Book a no-obligation free home evaluation in London, Ontario with a local broker who has current comparable sales data.
2. Know your mortgage renewal date and current balance. Pull your mortgage statement and note your exact renewal date, outstanding principal, and what rate increase you could absorb before payments become unmanageable.
3. Model three scenarios. Using the mortgage calculator, run hold/rent/sell scenarios so you have actual numbers — not gut feelings — driving your decision.
4. Consult a mortgage broker before your renewal. Start renewal conversations 4–6 months early. A mortgage broker can shop multiple lenders and potentially arrange better terms than your existing lender's posted rate.
5. Talk to an accountant about rental and tax implications. If renting out your property — in whole or in part — is on the table, understand the principal residence exemption, rental income treatment, and capital gains implications before you act.
6. Build or protect your cash reserve. Regardless of which path you choose, having 3–6 months of carrying costs in a liquid savings account is the single best protection against being forced into a bad decision by a short-term cash flow event.