Find the best mortgage rate in Ontario
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Current Ontario mortgage rates
The rate table shows 5-year fixed mortgage rates in Ontario. To compare other rate types and terms, click on the filters icon beside the down payment percentage.
As of:
Ontario mortgage rates: FAQ
Will mortgage rates go down in 2024?
Could we finally see some lower mortgage rates in 2024? The cost of borrowing in Canada soared throughout 2022, with fixed mortgage rates more than doubling and variable mortgage rates skyrocketing by over 500 basis points from their pandemic-era lows. 2023 saw borrowing become even more expensive, with three rate hikes totalling 75 basis points from the Bank of Canada, for a cumulative 10 rate hikes in the past two years. After enduring all of that, it’s no surprise that Canadians are wondering whether 2024 could bring some long-awaited relief.
In welcome news for borrowers, the Bank of Canada, which uses its trend-setting overnight lending rate to manage monetary policy and control inflation, has strongly indicated that it will not need to continue hiking rates. In its third announcement of the year on April 10, 2024, the Bank of Canada opted to hold the overnight lending rate steady for the sixth time in a row, citing multiple key economic indicators, including a stalled economy and softening labour market conditions. However, the Bank noted that inflation, currently at 2.8%, remains above its target of 2%, and stated that rates would need to stay higher for longer in order for them to have their full intended effect.
However, so long as data continues to trend in the right direction, most expert observers are anticipating that the Bank will hold rates steady for the foreseeable future before beginning to cut rates towards the end of 2024 and into 2025. Should that come to pass, the prime rate in Canada will lower in response, and with it, variable mortgage rates.
Although fixed mortgage rates aren’t directly influenced by the Bank of Canada’s rate decisions, they are tied to the bond market, which is highly responsive to investor sentiment. Whenever the Bank of Canada hikes rates, it triggers bond sell-offs by investors, as rate hikes devalue their existing bonds. Sell-offs, in turn, cause bond yields to climb. As yields are the funding floor that lenders use when pricing their fixed-rate mortgage offerings, whenever bond yields go up, so do fixed mortgage rates. After attaining a 16-year high of 4.42% back in October, bond yields gradually slid back down to the low 3% range in the end of 2023 and the start of 2024. Since then, they have been on a bit of a rollercoaster ride, spurred by tense investors who are quick to react to various economic reports coming out of Canada, the US and elsewhere. Bond yields climbed up to about 3.8% in January and into February, before tumbling back down to 3.3% in response to January’s lower-than-expected CPI reading of 2.9% along with other key economic indicators. More recently, robust jobs and elevated CPI from the US has pushed them up to the 3.7% range. With the latest rate hold widely expected by investors, the bond market has reacted minimally. As such, fixed mortgage rates will likely remain relatively stable for the near future.
Will mortgage rates go down if inflation decreases?
To counteract runaway inflation, the Bank of Canada hikes its target for the overnight rate. In doing so, the Bank makes it more expensive to borrow money and incentivizes saving. When people spend less and save more, demand decreases, causing inflation to decrease as well. In its third announcement of 2024 on April 10, the Bank of Canada held the target for the overnight rate for the sixth consecutive time, but noted that February’s CPI reading of 2.8% remained above the Bank’s target rate of 2%. In consequence, the Bank indicated that rates needed to stay higher for longer in order to tamp inflation down to their goal. Should inflation continue trending downward, we can expect that the Bank of Canada will begin to cut interest rates, with many market experts predicting that this will start happening towards the end of 2024 and into 2025. When this happens, variable mortgage rates will decrease immediately in response.
Fixed mortgage rates are tied to the bond market rather than to the Bank of Canada. When bond yields rise, the cost of lending money increases, which compels lenders to raise their fixed mortgage rates. However, the same runaway inflation that forced the Bank of Canada to effect 10 rate hikes over 2022 and 2023 also sent bond yields climbing. They reached a 16-year high of 4.42% back in October, but then cooled to the low 3% range in late December and early January as inflation abated. Lenders lowered their fixed mortgage rates in response. Since then, they have swung up and down at a dizzying rate, with jumpy investors quick to react to various key economic reports from Canada and abroad. Bond yields rose to the 3.8% range in January before coming back down to the 3.3% range in February in light of declining inflation and other factors. Since then, a robust jobs report and elevated CPI from the US has sent them up to the 3.7% range, where they sit currently. With the Bank’s most recent rate hold widely expected, the bond market has reacted minimally in response, keeping fixed mortgage rates elevated but stable. As the effects of the Bank’s rate hike cycle continue to make their way through the economy, we can reasonably expect that inflation will keep trending downward. This should allow bond yields to make a more steady descent as well, which will cause fixed mortgage rates to fall.
What are the current mortgage rates in Ontario in 2024?
As of April 27, 2024, the best high-ratio, 5-year fixed mortgage rate in Ontario is 4.79%. The best high-ratio, 5-year variable mortgage rate in Ontario is 5.95%.
To compare the most up-to-date mortgage rates in Ontario, use our rate tables above. They are updated several times daily, whenever there are any mortgage rate changes across the different providers.
What bank currently has the best mortgage rate in Ontario?
The Big 5 Bank that currently advertises the lowest fixed mortgage rates in Ontario is RBC with 4.84%.
The Big 5 Bank that currently advertises the lowest variable mortgage rate in Ontario is BMO, with 6.45%.
What is today’s prime rate and how does it affect mortgage rates in Ontario in 2024?
The prime rate in Canada today, April 27, 2024, is currently 7.2%. The prime rate is the interest rate used by Canada’s major banks and financial institutions to set interest rates for variable loans, including variable-rate mortgages. In fact, variable-rate mortgages are actually expressed as a discount from the prime rate. Hence, a variable rate today of 6.00% is actually stated on a mortgage contract as Prime -120% (because prime is currently at 7.2%).
The prime rate is directly affected by the Bank of Canada’s (BoC’s) target for the overnight rate. The Bank of Canada itself does NOT set the prime rate. Prime rates are set by the different lending institutions. However, when the BoC changes its target for the overnight rate, lenders normally follow suit and adjust their prime rates accordingly.
Thus, when the Bank of Canada announces a rate hike of 0.25%, most lenders will also increase their prime rate by 0.25%. Consequently, variable-rate mortgage holders then see their mortgage rates go up by the same 0.25%.
What is the average 5-year mortgage rate in Ontario?
As of April 18, 2023, the average of the Big 5 Banks' best, high-ratio, 5-year fixed mortgage rates in Ontario is 5.05%.
WATCH: April 10, 2024 Bank of Canada announcement
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Getting the best mortgage rates in Ontario
Jamie David, Sr. Director of Marketing and Mortgages
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.
Best mortgage rates in Ontario +
Rates updated:
Rate | Term | Type | Provider |
---|---|---|---|
4.79% | 5 years | Fixed | Canadian Lender |
4.84% | 3 years | Fixed | Big 6 Bank |
4.99% | 4 years | Fixed | Desjardins |
4.99% | 7 years | Fixed | Desjardins |
5.59% | 2 years | Fixed | Canadian Lender |
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: April 2024 update
On April 12, 2024, the Canadian Real Estate Association (CREA) released the latest figures on the national housing market, including sales activity, average price performance and overall supply and inventory.
The most recent numbers from CREA reveal that activity in the Ontario housing market continued to heat up in March, albeit not enough to avoid declining on an annual basis. While the total of 15,167 homes sold in Ontario in March 2024 was significantly above the previous month’s impressive total of 12,787, it marked a -4.4% decline when looked at year over year. Continuing a trend observed in the first months of this year, the market was positively inundated with new listings, with some 30,610 residential properties newly listed for sale in March. This represents a year-over-year increase of 14.4%, and is notably above February’s total of 24,824.
This abundance of new listings was not quite enough to counter the effects of growing demand, however. The average home price in Ontario ticked up slightly to $889,033, up by 1.4% on an annual basis, and notably above the previous month’s figure of $873,207.
Despite demand growing month over month, the influx of new listings has helped push buying conditions towards the buyer-friendly end of the spectrum of a balanced market, with a sales-to-new-listings ratio (SNLR) of 49.5%, substantially better for buyers than it was at the same time last year (59.3%). To put this in context, according to CREA, a SNLR within 45 - 65% indicates a balanced market, with above and below that threshold representing sellers’ and buyers’ markets, respectively.
Read more: Canadian home sales were flat in March, but rate cut boost expected
April 10, 2024: Bank of Canada announcement highlights
On April 10, 2024, the Bank of Canada held the target for the overnight rate steady at 5.00%.
- In its accompanying commentary, the Bank cited multiple reasons underlying its decision to maintain the overnight lending rate, such as a stalled economy and weakening labour market conditions. It noted, however, that despite the progress made in the fight against inflation, February’s CPI of 2.8% remained above its inflation target of 2%, and indicated that higher rates were therefore needed for longer to ensure that inflation has been well and truly beaten back.
- Canadians with variable-rate mortgages and home equity lines of credit (HELOC) will need to remain patient, as the Bank indicated that there was no change in timing for prospective future rate cuts.
- While fixed mortgage rates are tied to the bond market rather than the Bank of Canada’s policy rate, the Bank’s rate decisions and accompanying commentary do influence bond yields. With this latest rate hold widely expected, the bond market has reacted minimally. As such, we can expect lenders to maintain their fixed mortgage rates for the near future.
- This announcement is unlikely to have any effect on home prices. Buyers and sellers have already turned out in force this year at the prospect of rate cuts at the end of 2024 and into 2025, and the commentary accompanying the latest announcement does not indicate any change in that timing.
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.
Jamie David, Director of Marketing and Head of Mortgages
Jamie has 15+ years of business and marketing experience. She contributes her mortgage expertise to The Globe and Mail and authors Ratehub’s mortgage and homebuying guides. read full bio