Find the best mortgage rate in Ontario

Using our rate tables, you can compare today's best mortgage rates in Ontario from the Big 5 Banks, small banks, credit unions and top mortgage brokers, instantly, all in one place. Shopping around is critical if you want to find the best mortgage for your needs, and can save you thousands of dollars. 

Ontario at a glance

• Population: 14.83 million - most populous province in Canada, with just over 38% of the country’s population
• Average Household Income: $74,287
• Percentage of Homeowners: 70%

Ontario housing market: November 2024 update

On November 15, 2024, the Canadian Real Estate Association (CREA) released the data on the national housing market for October, covering sales activity, average price trends, and overall supply and inventory.

According to the CREA, home sales increased by a whopping 36.7% year over year, with 15,893 properties sold in Ontario in October. While buyer activity has picked up, sellers have been slower to respond—new listings increased to 33,313 homes, reflecting a 5.3% rise compared to the same period last year. The overall months of inventory now stand at 3.8 months, down by -0.6 months, indicating a weaker supply compared to demand.

Ontario’s average home price in September increased slightly by 3.1%, bringing it to $878,620. Even though the sales-to-new-listings ratio rose to 47.7%, up from 36.8% a year ago, market conditions are still favourable for buyers. CREA considers a ratio between 45% and 65% to represent a balanced market, with ratios below 45% indicating a buyers' market and above 65% indicating a sellers' market.

Read more: National home sales rise 30% in October

Will mortgage rates decrease if inflation continues to fall?

On October 15, Statistics Canada reported a 1.6% year-over-year rise in the Consumer Price Index (CPI) for September, down from 2.0% in the previous month. 

Read: Canadian CPI falls to 1.6% in September, increasing chance of half-point rate cut

This downward trend in inflation opens the door for potential further cuts to the Bank of Canada’s (BoC) overnight lending rate. With another rate cut already expected in the Bank’s upcoming December 11 announcement, the focus now shifts to how many additional cuts could follow in the coming year.

The overnight rate directly influences the prime rate set by lenders, which in turn is used to set the price of variable mortgage rates and home equity lines of credit (HELOCs). Therefore, when the BoC raises its rate, it makes it more expensive for consumers and businesses to borrow money.  This leads to less consumption (less spending and borrowing), which in turn decreases the rate of inflation. Alternatively, when the pace of inflation falls below the BoC’s target, it cuts the overnight rate to make it cheaper to borrow, thereby stimulating the economy.

Between June and October 2024, the BoC has already reduced rates four times, bringing the benchmark borrowing rate down to 3.75%. 

Read more: Bank of Canada cuts target interest rate by 0.5% in October announcement

While fixed mortgage rates are not directly tied to the Prime rate or the BoC’s overnight rate, they are influenced by 5-year bond yields, which have recently fallen to around 2.7%. This drop could give lenders room to further reduce fixed mortgage rates. 

How do I get the best mortgage rate in Ontario?

 As home to Canada's financial capital, Toronto, Ontario naturally has an extremely competitive mortgage market. All of the Big 5 Banks have their headquarters in Toronto, as do major Canadian credit unions including Meridian Credit Union, DUCA Financial Services Credit Union and Alterna Savings and Credit Union. Many other smaller lenders, credit unions and mortgage brokerages are also located in Ontario. 

With such a variety of options, it's important to remember that the best mortgage rate is not always the lowest rate; rather, it's the one that meets your needs and best suits your financial situation. That makes it all the more crucial that you compare multiple lenders and speak with a mortgage broker. They can walk you through different mortgage products and help you understand the benefits and drawbacks of each so that you can make an informed decision.  

What factors affect the mortgage rate I get?

The mortgage rate that you qualify for will depend on a number of factors, some of the most important of which are: 

• Your down payment - The size of your down payment will determine the amount of insurance your mortgage will require. The larger your down payment, the less insurance your mortgage will require. Though it may seem counter-intuitive, uninsured mortgages actually have higher rates. This is because lenders take on more risk for these mortgages since they cannot get insurance on them. Though you may not get the lowest rate, it is usually always better to put a larger down payment if you can afford it because you won’t have to pay for mortgage insurance. 
• Your amortization period - Mortgages with amortization periods greater than 25 years are not usually insurable and therefore come at a higher rate. However, a longer amortization period allows you to have a lower monthly payment.
• What the property will be used for - Will you be living in the property? Mortgage rates for rental properties are typically higher than for those that are owner-occupied. 
• Mortgage type - Mortgage rates for refinances are usually higher than rates for renewals and purchases.
• Your employment status - You need to provide proof of income in the form of paystubs and/or tax documents such as your Notice of Assessment (NOA). If you're self-employed, work on commission, or otherwise do not have a steady income, it can be more complicated and/or expensive. 
• Your credit score - Your credit score may affect the type of lenders that will work with you. If you have bad credit, you may not qualify for a Big Bank mortgage.
• Your debts - Lenders will look at your debt service ratio when considering whether to approve your mortgage. Carrying an excessively high amount of debt negatively impacts your debt service ratio as well as lowering your credit score. 

Historical trends in Ontario mortgage rates 

Ontario mortgage rates rise and fall, as do rates across Canada. Here’s an interactive chart showing the lowest mortgage rates in Canada over the past few years to give you an idea of where we are today.

Land transfer tax in Ontario

Land transfer taxes are often overlooked, despite being one of the biggest closing costs when purchasing a home. For people in Toronto, a land transfer tax is levied by the City of Toronto, in addition to Ontario’s provincial land transfer tax.

Ontario land transfer tax

In Ontario, land transfer taxes are based on the purchase price of the property, with the tax rate increasing as the price of the home rises. Here’s a breakdown of the rates:

Source: Ontario Ministry of Finance

*The $2 million bracket was introduced on January 1st, 2020.

Toronto Land Transfer Tax

When purchasing a home in Toronto, you’ll also pay a municipal land transfer tax. Toronto’s land transfer tax applies within certain boundaries: Steeles Avenue to the North, Etobicoke to the West, Scarborough to the East, and Lake Ontario to the South.

Here are the current Toronto land transfer tax rates:

Source: City of Toronto

Ontario first-time home buyer programs

In an effort to make it easier for first-time home buyers to get into the market, there are several programs and rebates available in Ontario. These are available to citizens or permanent residents of Canada who haven’t owned property before. 

Ontario’s Land Transfer Tax Rebate for First-Time Home Buyers provides a rebate of the full amount of your land transfer tax, up to a maximum of $4,000. If you are buying with a spouse who does not qualify, you will only be eligible for 50% of the refund. 

Toronto’s First-Time Home Buyers Land Transfer Tax Rebate provides a rebate of the full amount of your municipal land transfer tax, up to a maximum of  $4,475. This rebate is available regardless of whether you buy a townhouse, house, or condo. You can use the Toronto land transfer tax rebate in addition to the Ontario land transfer tax rebate. 

Learn more by reading our guide to First-Time Home Buyer programs in Canada.

Ontario non-resident speculation tax

In an effort to prevent foreign investors from inflating housing prices in Ontario, the Ontario government places a 15% tax on all purchases of residential properties by foreign buyers in the Greater Golden Horseshoe area. This is on top of any land transfer taxes. Foreign buyers include overseas corporations, as well as individuals who aren’t Canadian citizens or permanent residents.

More Homes Built Faster Act

On October 25, 2022, the government of Ontario introduced the More Homes Built Faster Act, which is part of a long-term strategy to increase the housing supply and ensure that affordable housing options exist for Ontarians. Significantly, the provincial government aims to facilitate the construction of 1.5 million new homes over the next decade.

More recently, on May 10, 2023, the City of Toronto adopted two amendments - the Official Plan Amendment and the Zoning By-law Amendment - to permit multiplexes of up to fourplexes on residential lots across the city. These amendments are not yet in effect, but have the potential to create a significant amount of sorely needed new housing options for Toronto residents.

Sources:

1. Ontario.ca
2. CREA
3. Statistics Canada
4. Legislative Assembly of Ontario