How wildfires impact housing affordability in Canada

Home insurance now accounts for up to nearly one-fifth of mortgage payments in Canada’s wildfire zones, according to a joint study from insurtech MyChoice and Canadian digital real estate platform Wahi.

The analysis, based on thousands of real quotes from MyChoice.ca combined with Real Property Solutions (RPS)-Wahi housing price index data, finds that in wildfire-prone communities, home insurance is no longer just a side cost. In some cases, it’s consuming a staggering share of monthly mortgage payments, MyChoice tells Canadian Underwriter.

For example, in Medicine Hat, Alta., home insurance payments now equal 19% of a typical mortgage payment — the highest in Canada. Wood Buffalo, Alta. — which includes Fort McMurray, the site of Canada’s costliest natural disaster in 2016 of about $4 billion — follows closely behind, with insurance making up 16% of mortgage payments.

In four other Canadian cites — Prince George, B.C., Timmins, Ont., Kenora, Ont., and Lethbridge, Alta. — insurance premiums now represent 10% or more of monthly mortgages.

“Homeownership costs are no longer just about mortgage payments — climate risk is rapidly becoming a key financial factor,” MyChoice CEO Aren Mirzaian tells CU. “Our joint study with Wahi shows that in Canada’s wildfire-prone cities, insurance premiums are rising faster than home values, directly impacting housing affordability.”

MyChoice says it believes this is the first cross-Canada study to directly connect wildfire risk, home insurance inflation and mortgage affordability. “It highlights a growing reality: climate change is no longer just a natural disaster issue — it’s a pocketbook issue for Canadian homeowners.”

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Nationally, the share of insurance relative to mortgages held flat at about 2% — “underscoring just how localized and severe the affordability crunch is in wildfire-exposed areas.”

For the study, thousands of actual homeowner quotes generated through MyChoice between January 2025 and June 2025 were examined and compared with the same period in 2023. A standardized homeowner profile was used for consistency. “By combining the MyChoice dataset with the RPS-Wahi home value estimates, the report was able to quantify how wildfire risk translates into insurance cost changes and overall housing affordability pressures across Canadian cities.”

To illustrate this, the monthly insurance-to-mortgage payment ratio for each city was calculated, factoring in local home value estimates, standard mortgage assumptions (five-year fixed term, 20% down payment and the prevailing interest rates for 2023 and 2025), and the average home insurance premiums.

The study finds both Alberta and British Columbia are seeing the sharpest pressures on affordability. 

“In B.C., rising wildfire risk has driven premiums up significantly, though high property values in cities like Vancouver and Victoria keep the insurance-to-mortgage ratio relatively modest,” the report says. “Alberta, meanwhile, faces a more volatile picture. Some areas are experiencing severe affordability strain, with insurance consuming a large share of mortgage payments, while others saw rare relief in premiums.”

The report warns if insurance ratios continue rising, it could start influencing where Canadians choose to buy homes. “In markets where insurance is 15%-to-20% of mortgage payments, younger buyers may be priced out not by the house itself, but by the ongoing cost of protecting it.”

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.