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Check out today's best mortgage rates in Canada by type and term.
| Insured ? | 80% LTV ? The rates in this column apply to mortgage amounts between 65.01% and 80% of the property value. The home must be owner-occupied and have an amortization of 25 years or less. You must have purchased it for less than $1 million. These rates are not available on refinances. Refinances require "Uninsured" rates. | 65% LTV ? The rates in this column apply to mortgage amounts that are 65% of the property value or less. The home must be owner-occupied and have an amortization of 25 years or less. You must have purchased it for less than $1 million. These rates are not available on refinances. Refinances require "Uninsured" rates. | Uninsured ? | Bank Rate ? | ||
|---|---|---|---|---|---|---|
Insured 5.04% | 80% LTV 4.59% | 65% LTV 4.59% | Uninsured 6.63% | 6.29% | ||
Insured 4.54% | 80% LTV 4.79% | 65% LTV 4.54% | Uninsured 4.54% | 5.59% | ||
Insured 4.14% | 80% LTV 4.14% | 65% LTV 4.14% | Uninsured 4.49% | 4.89% | ||
Insured 4.24% | 80% LTV 4.14% | 65% LTV 4.14% | Uninsured 4.49% | 4.74% | ||
Insured 3.99% | 80% LTV 3.99% | 65% LTV 3.99% | Uninsured 4.19% | 4.59% | ||
Insured 4.44% | 80% LTV 4.39% | 65% LTV 4.39% | Uninsured 5.9% | 5.5% | ||
Insured 5.09% | 80% LTV 5.29% | 65% LTV 5.29% | Uninsured 5.8% | 7.14% | ||
Insured 5.1% | 80% LTV 5.2% | 65% LTV 5.1% | Uninsured 5.1% | 7.35% | ||
Insured 4.8% | 80% LTV 4.9% | 65% LTV 4.8% | Uninsured 4.8% | 5.15% | ||
Insured N/A | 80% LTV N/A | 65% LTV N/A | Uninsured N/A | N/A | ||
Insured 5.25% | 80% LTV 5.25% | 65% LTV 5.25% | Uninsured 5.25% | N/A |
Mortgage rates in Ontario are determined much like they are in the rest of Canada.
The prime rate is the target lending rate that banks use to set interest rates for variable loans, lines of credit and mortgages. Each bank sets its own prime rate. Because of stiff competition among the banks, getting the best Ontario mortgage rates is not too difficult, given that most banks follow each other if one of them lowers or raises its rates by a point or two.
The prime rates used by the individual banks are generally set based on the Bank of Canada overnight target rate. The central bank uses the target rate to influence how the banks set their own rates and acts as a barometer for the rate at which banks borrow and lend among themselves.
Ontario is Canada’s largest province, with a diverse population of nearly 16 million people. However, the population is aging quickly, and Ontarians are moving into retirement faster than new workers are replacing them, making immigration vital to the province's economy. Immigration remains relatively high, with 198,773 immigrants settling in the province year-to-date 2024, up from 195,168 in April 2023. Ontario received 44.4% of all immigrants to Canada over this period, up from 41.6% in the previous year. This all contributes to an enormous demand for housing.
Monetary policy also plays a major role in determining mortgage rates. As inflation has crept into our daily budgets, current mortgage rates in Ontario have also been on the rise. Inflation does not directly affect mortgage rates but as the Bank of Canada raises rates to cool down economic activity, homebuyers may retreat from the market.
As a result, there is greater competition among lenders in Ontario as Ontarians seek better rates. For example, credit unions and private lenders, which make up about 3.7% of the country's mortgage business, handle about 6.7% of the province’s mortgages. High demand from homebuyers is fueling competition between lenders in the province.
Mortgage rates, as mentioned, are set by the lending institutions, which in turn are influenced by the Bank of Canada's overnight target rate. However, other factors can affect your Ontario mortgage rate.
According to the Canadian Real Estate Association, the average price for a house in Ontario was $940,845 as of May 2022. In Ontario, you will need at least a 5% down payment for purchases between $500,000 and $1 million and 10% for the remaining amount.
The ongoing debate about taking out a fixed or variable mortgage will certainly affect your rate. Variable rates lock in your payment, but your interest rates fluctuate with the rate changes in the market. Fixed rates allow both principal and interest payments to remain constant and provide peace of mind for the borrower.
Lenders will need to calculate your Gross Debt Service (GDS) Ratio. GDS is the percentage of your monthly income that covers your housing costs; it must not exceed 39%. Total Debt Service (TDS) is the percentage of your monthly household income that covers your housing costs and any other debts; it must not exceed 44%.
The formulas to find your debt service ratios, according to the CMHC, are as follows:
Gross debt service formula:
(Principal + interest + taxes + heat)/Gross annual income
Total debt service ratio formula:
(Principal + interest + taxes + heat + other debt obligations)/Gross annual income
Of course, increasing the downpayment as high as 20% would eliminate the CMHC insurance, and monthly payments would decrease.
Another factor that affects your mortgage rate is lump sum payments. The faster you pay down your mortgage, the more you save on interest rate charges. It also shortens the length of time required to pay off your debt.
A lump sum payment is a one-time payment you make towards your mortgage outside your regular payment schedule. Some banks may allow payments of up to 15% of your original borrowed amount per year without triggering a prepayment charge. For example, if you have a mortgage of $400,000, you can make a lump sum payment of $60,000 per year on top of your other payments. This can be done at once or spread out over the course of the year.
Also, your credit score can affect your rate positively or negatively, depending on your history. A good credit rating shows the lender you’re a “good risk” and will likely pay back the loan, leading to a better interest rate than someone with a lower credit score. In 2020, the Canada Mortgage and Housing Corporation increased the minimum credit score requirement on insured mortgages from 600 to 680.
What if you are buying an income property and you don’t plan to live there? That will most certainly affect your interest rate, which tends to be higher as lenders perceive this as a riskier loan.
If you are self-employed and work from home, mortgage rates can be higher but aren’t always. Building up capital and the viability of your business will also play a role in finding the best mortgage rates in Ontario.
5.05%
4.29%
7.24%
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Let’s start with the basics. A conventional mortgage is a mortgage loan of up to 80% of the value of the property you are buying. A high-ratio mortgage is a mortgage loan higher than 80% of the property’s value.
The Canadian bond yields reached their peak in October 2023 then subsequently declining in 2024. The 5-year bond yield (that leads the 5-year fixed mortgage rate pricing) jumped to a high of 4.46%, which can be attributed to the markets re-pricing after expectations that the Bank of Canada rate could stay higher for longer.
However, the yields mellowed down in 2024 as markets were optimistic about Bank of Canada’s rate cut in the second half. The BoC went for its first rate cut in two years on June 5, 2024. The 5-year bond yield has come down at 3.5% (June 26, 2024) and if the BoC rate cut trend continues, it is likely to favor the 5-year fixed mortgage rate.
| Date | Average Conventional Rate | Average High Ratio Rate |
|---|---|---|
| 11/23 | 6.15% | 5.77% |
| 12/23 | 5.92% | 5.56% |
| 01/24 | 5.66% | 5.29% |
| 02/24 | 5.30% | 5.05% |
| 03/24 | 5.17% | 4.92% |
| 04/24 | 5.10% | 4.91% |
| 05/24 | 5.12% | 4.98% |
| 06/24 | 5.13% | 5.03% |
| 07/24 | 5.08% | 4.99% |
| 08/24 | 5.22% | 5.08% |
| 09/24 | 5.16% | 4.96% |
| 10/24 | 4.89% | 4.63% |
Last Updated: November 1, 2024
Among the myriad decisions consumers must make when taking the leap into home ownership, selecting the type of mortgage they choose is at the top of the list. Should you get a fixed or variable mortgage?
A fixed rate mortgage is just that – fixed over a period of time. Interest rates and the mortgage payments remain the same (and consistent) over that mortgage term.
A variable rate mortgage is different. While the mortgage payment remains constant, the interest rate payments fluctuate with the prime interest rate.
Variable rates were more desirable than fixed rates before Bank of Canada’s rate hike spree began in March 2022. After BoC’s 10 rate hikes, the 5-year variable mortgage rate became much higher and went over the 5-year fixed mortgage rate at the end of 2022. Fixed rate reached its peak in October 2023 and began declining in 2024, making it more affordable for borrowers. The first BoC rate cut in two years came on June 5, 2024, which has given variable rate borrowers some respite. But it is safe to say that shorter term fixed rates are more likeable currently over variable rates.
| Month | Fixed | Variable |
|---|---|---|
| 11/23 | 5.83% | 6.50% |
| 12/23 | 5.63% | 6.44% |
| 01/24 | 5.43% | 6.34% |
| 02/24 | 5.21% | 6.44% |
| 03/24 | 5.06% | 6.34% |
| 04/24 | 4.98% | 6.30% |
| 05/24 | 5.06% | 6.32% |
| 06/24 | 5.06% | 6.39% |
| 07/24 | 4.94% | 6.17% |
| 08/24 | 5.03% | 6.15% |
| 09/24 | 5.04% | 6.15% |
| 10/24 | 4.79% | 5.75% |
Last Updated: November 1, 2024
Mortgage rates across Canada have been trending upward since the third quarter of 2022. Inflation has been a troubling economic trend, and the Bank of Canada has raised the key interest rate to curb its effects.
Mortgage borrowers have experienced a tight situation with Bank of Canada’s rate hikes since March 2022. The Bank increased its policy interest rate 10 times until finally cutting 0.25% in June 2024. As a result, borrowers have been facing difficulties in securing a low interest rate, that was quite the norm before 2022. This also means that people have been opting for smaller mortgages and looking for more affordable housing outside of the big provinces like Ontario or BC.
Rising interest rates have meant that people are opting for smaller mortgages. The average value of new mortgage loans in Canada dropped by nearly 11.2% to an average rate of $320,298, suggesting that people can't afford as much or are simply staying out of the housing market. In Ontario, the province with the most active real estate market, the average value of new mortgage loans stood at $448,031 in the first three months of 2022 but now sits at $426,021 in Q4 2023. This is a result of high interest rates and borrowers staying on the sidelines waiting for BoC’s further rate cuts.
The average value of new mortgages loans Ontario:
Geography | 2019 Q2 | 2019 Q3 | 2019 Q4 | 2020 Q1 | 2020 Q2 | 2020 Q3 | 2020 Q4 | 2021 Q1 | 2021 Q2 | 2021 Q3 | 2021 Q4 | 2022 Q1 | 2022 Q2 | 2022 Q3 | 2022 Q4 | 2023 Q1 | 2023 Q2 | 2023 Q3 | 2023 Q4 | |
Canada | $258,241 | $256,616 | $274,762 | $276,236 | $278,928 | $289,038 | $297,367 | $313,607 | $323,678 | $343,971 | $364,954 | $350,686 | $361,001 | $366,163 | $363,654 | $325,612 | $320,298 | $314,540 | $338,522 | $327,899 |
Ontario | $297,599 | $301,166 | $324,455 | $324,403 | $324,752 | $345,681 | $358,658 | $376,522 | $380,853 | $419,836 | $448,835 | $434,185 | $448,031 | $462,494 | $462,701 | $418,808 | $406,429 | $405,749 | $434,006 | $426,021 |
The amount of money you borrow for your mortgage will have an effect on future costs. Why? Processing a mortgage comes with costs lenders money, meaning fees are prevalent even at low mortgage amounts. For example, it can cost as much as $1,000 to process, underwrite and fund a home loan.
Let’s say a lender charges a 0.5% fee, also known as an origination fee. On a larger mortgage of $400,000, that fee comes to $2,000. On a low mortgage amount, say $40,000, that fee would equal $200. If processing fees are $1,000, the lender would lose money and therefore have to raise the fee on “low loan amounts” to not only cover expenses but make a small profit
Large loan amounts have a risk factor attached to them. Lenders stand to lose more if they lend out large amounts to borrowers who can’t pay their debts. As a result, some lenders often have stricter underwriting guidelines that require a larger downpayment and higher credit score to secure the loan.
Due to interest rate hikes, average monthly mortgage payments in Ontario have risen steadily from $1,897 in Q1 2022 to $2,770 in Q4 2023. The dramatic increase in interest rates starting March 2022 following BoC rate hikes led to this steady and historic increase in mortgage rates. Borrowers who are up for renewal in the coming months will bear the brunt of these high interest rates, especially those who enjoyed lower rates before 2022.
| Q1 – 2019 | Q2 – 2019 | Q3 – 2019 | Q4 – 2019 | Q1 – 2020 | Q2 – 2020 | Q3 – 2020 | Q4 – 2020 | Q1 – 2021 | Q2 – 2021 | Q3 – 2021 | Q4 – 2021 | Q1 – 2022 | Q2 – 2022 | Q3 – 2022 | Q4 – 2022 | Q1 – 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $1,599 | $1,587 | $1,635 | $1,617 | $1,642 | $1,662 | $1,680 | $1,691 | $1,676 | $1,807 | $1,899 | $1,824 | $1,897 | $2,099 | $2,392 | $2,449 | $2,494 |
Searching for the lowest mortgage rate in Ontario, here's something you can do:
Ontario is one of the biggest housing markets in Canada, besides British Columbia. The province also sees a great number of immigrants landing here as it is very obviously considered the land of opportunities with big bank headquartered here and the province being home to some big industries and companies. However, with rising inflation, economic changes and soaring interest rates, that sentiment is slightly diminishing. People are looking for more affordable housing markets to dodge the interest rate bullet. A recent study by Conference Board of canda showed consumer confidence in Ontario edged down in June 2024. Concerned over employment opportunities and rising household budgets, Ontarians’ sentiment about making big purchases like a house or car remains at historically low levels.
This is evident in the housing market in Ontario where home sales have been 11.2% below the 5-year average and 21% below the 10-year average for the month of May.
The average price of resale residential homes sold across the province in May 2024 was $890,634, decreasing by 3.7% from May 2023.
While residential listings have been increasing – active listings were 54.9% above the five-year average and 23.2% above the 10-year average for May 2024 – sales activity has been declining. The dollar value of all home sales in Ontario in May 2024 was $15.9 billion, down sharply by 19.4% from the same month in 2023.
Borrowers are on the edge with the interest rates and those up for mortgage renewals are going to be in for a shock with high rates. Unless the Bank of Canada reduces its rate further to around 4%, it is hard to get consumer confidence back. Analysts believe the BoC will work towards reducing rates by 2025-2026 but it is unlikely that mortgage rates will go back to pre-2022 levels anytime soon.
Closing costs are the one-time fees buyers pay upon purchasing property in Ontario. Generally, closing costs include:
Land or transfer tax
Lawyer fees
Inspection fees
Homeowner’s insurance
Appraisal fees
Typically, closing costs can range from 1.5% to 4% of the home’s purchase price. For example, for a home in Toronto that costs $1.352 million, you can expect fees to range from $49,000 to $52,000.
Non-residents (non-citizens or non-permanent residents) who purchase a home in Ontario can expect an additional tax burden to the price they are paying. In Ontario, that tax – the Non-Resident Speculation Tax (NRST) has recently been raised to 20% on top of the property’s value.
Exemptions are made for nominees – those that are nominated under the Ontario Immigrant Nominee Program, protected persons – those with refugee status, and spouses – foreign nationals purchasing a property with a spouse.
Also, rebates for the NRST are available to foreign nationals who become permanent residents of Canada, international students, and foreign nationals who work in Ontario.
The Bank of Canada decided to cut its target for the overnight lending rate from a 22-year high of 5% to 4.75% on June 5, 2024. This move by the BoC was widely speculated by financial markets as the inflation rate was inching closer to the Bank’s target. However, even as the Canadian economy picked up in Q1 2024, it was still weaker than expected because employment was rising at a slower rate than the working age population and immigration was not making this easier.
This situation is making borrowers and investors increasingly cautious about investing in big commodities like a house.
Even as the financial market expects interest rates to trend lower in 2025 and 2026, with the inflation rate it seems hard to anticipate if further rate cut will happen in 2024. No one can predict when Ontario’s mortgage rates will go down, however, we can say that if core inflation continue to show signs of a downward trend and closer to the BoC’s expected 2% range, we are likely to see lower rates towards the end of 2024 and beginning 2025.
It’s important to have a good credit score. Canada Mortgage and Housing Corporation says the credit score requirement on insured mortgages should be 680.
Other factors you should have in order can include:
Paying down debt – This can do a few things. Paying debt frees up resources to put toward your downpayment or mortgage. It also indicates to lenders that you are a “good risk” and have the ability (and desire) to pay loans in a responsible manner.
Calculating assets and liabilities – If knowledge is power, then understanding your economic situation will help you obtain the mortgage you need. By having a complete picture of assets and liabilities, you will be better prepared to provide the information lenders require to decide on your mortgage application. This can be done with an accountant, if you have one, or on your own.
Having a consistent employment history – Lenders want to see elements of your financial life that reduce risk. Being employed consistently indicates your ability to be financially responsible. This will be an important factor in indicating to lenders that you can pay your debts with little to no risk of default.
Having a large downpayment – The more you save towards the purchase of a house, the better you will be in the long run in terms of debt burdens. However, lenders also see this as a lower-risk proposition. The less you need to borrow, the quicker they can get their money back if you default on the loan. Monthly costs are reduced for you, and you look more attractive to lenders who are all about reducing their own risk.
Having enough income – Most important is proving you can carry the mortgage, usually calculated by your broker or mortgage agent using a debt service ratio analysis.
Unlike a bank, a mortgage broker can only offer mortgages from their line of products. They can access many lenders and help you choose the right product for your circumstance. More good news is that mortgage brokers are free to use and are paid by the lender while also having access to a variety of lender interest rates. In a similar way, comparison sites like LowestRates.ca can help you get rates from different mortgage providers without charging a fee.
Mortgage default insurance is a form of protection for the lender, not the buyer. The government of Canada requires mortgage default insurance to be paid by the borrower if they put less than 20% down on a home.
Default mortgage insurance is only available for homes priced under $1 million. To acquire it, you must meet the bank’s eligibility requirements as well as the underwriting standards of your mortgage insurer.
A mortgage term is the length of time the mortgage agreement at your agreed interest rate is in effect. An amortization period is simply the length of time it takes for you to repay your loan.
An open mortgage allows you to pay back the loan in full at any time. A closed mortgage allows limited lump-sum prepayments and includes penalties if you pay the loan ahead of schedule.
Which one to choose is a matter of preference. A close mortgage will generally have lower interest rates because of the limitations placed on the payment. But you may want to lift the burden of mortgage payments if, at some time, you feel you will be able to pay it back in full.
A mortgage rate hold or rate lock allows buyers a guaranteed interest rate on their mortgage for a set period (usually 30 to 60 days but up to a maximum of 120 days). It is usually used when a buyer knows they will be purchasing or refinancing their home in the near future.
Prepayment options allow you to repay your mortgage sooner than the original payment schedule. There are two ways to do this – increase your mortgage payments or pay a lump sum.
Applying for a mortgage online can be as safe and effective as doing it in person. In fact, online mortgage vendors often have more attractive rates due to the competitive nature of the business. It is wise, however, to be wary of the risk of fraud, online scams and illegal business practices when applying online. The Financial Services Regulatory Authority of Ontario has more information about how to distinguish who is — and who is not — a reputable mortgage lender.
A few factors will determine if you can get the lowest rate, including your credit score, employment record, and downpayment. Having that data and comparison shopping on sites like LowestRates.ca will ensure you are getting the lowest rates available.
LowestRates.ca works with 50+ banks and brokers to bring you competitive rates from banks and mortgage brokers in Ontario and across Canada. We work with our partners to obtain their best deals and offers, and then we let them compete for your business. All you have to do is answer a few questions, and in minutes you’ll be provided with today’s mortgage interest rates for Ontario. There’s no obligation, but you can choose to speak with our broker partner to secure your best rate and see if you're eligible for more savings.
We have a strong selection of lenders on LowestRates.ca, including the big banks and many independent providers. This ensures we’re always delivering you a competitive rate. Even if you’re not ready to commit to anything, you can use our site as a starting point for research (it’s totally free, and you’re under no obligation).
The better informed you are, the more likely you'll negotiate a better deal for yourself. And, really, that’s what we care about the most.
Shivani Kaul
About the Author
Shivani Kaul is a content manager in the personal finance space. Prior to this, she worked as a digital editor with Pagemasters North America (a division of The Canadian Press) for four years. Shivani has also worked as a freelance writer and editor for Investor's Digest of Canada and The Ghost Bureau.
She has more than a decade of experience working as an editor and writer for different news media organizations in Canada and South Asia. She has a Digital Marketing Management certification from the University of Toronto, a Master's degree in Mass Communication (Journalism) and a Bachelor's degree in English from the University of Delhi (India).
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