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 continue to go down in 2025?
After two years of steep rate hikes and surging borrowing costs, Canadian borrowers received some relief in the latter half of 2024. Since June, the Bank of Canada has cut its benchmark rate five times in a row, including a 0.50% reduction on December 11, 2024, which brought the Overnight Lending Rate down to 3.25%. These moves were largely prompted by moderating inflation, sluggish economic growth, and a rising unemployment rate—all factors that prompted the central bank to shift from raising rates to easing them.
With inflation now within the Bank’s 2% target and the economy continuing to soften, the environment supports the possibility of further rate cuts heading into 2025. While the Bank has indicated a more cautious, data-dependent approach, additional cuts can’t be ruled out. Each cut to the Overnight Lending Rate lowers the prime rate, reducing the borrowing costs for those with variable-rate products.
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. When 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. Most recently, in anticipation of a rate cut, bond yields began to tumble around 2.8% in the days leading up to the December 11 announcement. This may prompt lenders to discount their fixed mortgage rates. As such, fixed mortgage rates will likely trend downward in the near future.
Will mortgage rates continue to go down if inflation decreases more?
If inflation continues to trend lower or stays comfortably within the Bank of Canada’s 2% target, the central bank may keep reducing its key interest rate. By making borrowing cheaper, the Bank aims to stimulate economic activity without fueling unwanted price growth. Recently, on December 11, 2024, the Bank of Canada cut its Overnight Lending Rate by another 0.50%, marking the fifth consecutive reduction since June. Each time the Bank cuts its rate, the prime rate drops, leading to immediate decreases in variable mortgage rates.
Fixed mortgage rates are influenced by the bond market rather than directly by the Bank of Canada’s policy rate. When the central bank signals easier monetary policy, investor sentiment often shifts, leading to lower bond yields. With bond yields currently hovering around 2.8%, lenders have more room to lower their fixed mortgage rates.
Many have already trimmed their rates following the most recent rate cuts, and further downward movement in inflation or bond yields could result in even more discounts ahead.
What are the current mortgage rates in Ontario in 2024?
As of December 14, 2024, the best high-ratio, 5-year fixed mortgage rate in Ontario is 4.14%. The best high-ratio, 5-year variable mortgage rate in Ontario is 4.35%.
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 Banks that currently advertise the lowest fixed mortgage rates in Ontario are CIBC and RBC with 4.64%.
The Big 5 Bank that currently advertises the lowest variable mortgage rate in Ontario is TD with 5.59%.
What is today’s prime rate and how does it affect mortgage rates in Ontario in 2024?
The prime rate in Canada today, December 14, 2024, is currently 5.45%. 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 5.25% is actually stated on a mortgage contract as Prime -20% (because prime is currently at 5.45%).
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 cut of -0.50%, most lenders will also decrease their prime rate by -0.50%. Consequently, variable-rate mortgage holders then see their mortgage rates go down by the same -0.50%.
What is the average 5-year mortgage rate in Ontario?
As of September 5, 2024, the average of the Big 5 Banks’ best, high-ratio, 5-year fixed mortgage rates in Ontario is 4.74%.
WATCH: December 11, 2024 Bank of Canada announcement
Compare current mortgage rates across the Big 5 Banks and top Canadian lenders. Take 2 minutes to answer a few questions and discover the lowest rates available to you.
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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 |
---|---|---|---|
4.09% | 3 years | Fixed | Big 6 Bank |
4.14% | 5 years | Fixed | Canadian Lender |
4.34% | 4 years | Fixed | Desjardins |
4.49% | 7 years | Fixed | Desjardins |
5.14% | 6 years | Fixed | Bank of Montreal |
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%
December 11, 2024: Bank of Canada announcement highlights
In its eighth and final announcement of the year, the Bank of Canada (BoC) lowered the Overnight Lending Rate by 0.50%, bringing it to 3.25%. This marks the second 50-basis-point cut in a row after the October 2024 rate reduction. The Bank's aggressive cutting cycle, which started in June 2024, has now reduced the benchmark rate by 175 basis points.
- Weak economic growth, with Canada’s GDP growing only 1% in the third quarter and rising unemployment (6.8% in November), prompted the BoC to ease borrowing costs to support economic activity, despite inflation remaining within the target range of 2%.
- The Prime rate at most lenders will drop to 5.45%, which will reduce the interest rates for variable-rate mortgages and home equity lines of credit (HELOCs). Borrowers will either see their monthly payments decrease, or more of their payments will go toward the principal balance.
- Although fixed-rate mortgages are not directly affected by the BoC’s rate cuts, the five-year bond yields have already fallen to 2.8%. This drop will likely lead to further reductions in fixed mortgage rates in the coming days.
- High-interest savings accounts (HISAs) and Guaranteed Investment Certificates (GICs) will experience lower returns as a result of the rate cut. Savers looking to secure better returns should consider locking in rates now before they decline further.
- The BoC also signaled that future rate cuts in 2025 may be slower and more gradual, as the policy rate has already been significantly reduced.
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.
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