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.
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 first announcement of the year on January 24, 2024, the Bank of Canada opted to hold the overnight lending rate steady for the fourth time in a row, citing a number of key economic indicators including soft GDP numbers, reduced consumer spending and falling business investment. However, the Bank noted that inflation, currently at 3.4%, remains well 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, before climbing up to about 3.8% in response to multiple Canadian and US economic reports. While many lenders had discounted their fixed mortgage rates over the holiday season, some have now started to raise them again.
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 first announcement of 2024 on January 24, the Bank of Canada held the target for the overnight rate for the fourth consecutive time, but noted that December’s CPI reading of 3.4% remained well 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 trend 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. Then, a number of key economic reports sent bond yields climbing again, reaching the 3.8% range. As a result, there is currently upward pressure on fixed mortgage rates. However, 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 resume trending downward. This should allow bond yields to descend as well, which will cause fixed mortgage rates to fall.
What are the current mortgage rates in Ontario in 2024?
As of February 29, 2024, the best high-ratio, 5-year fixed mortgage rate in Ontario is 4.84%. 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 Banks that currently advertise the lowest fixed mortgage rates in Ontario are TD, CIBC and RBC with 5.14%.
The Big 5 Bank that currently advertises the lowest variable mortgage rate in Ontario is also RBC, with 6.59%.
What is today’s prime rate and how does it affect mortgage rates in Ontario in 2024?
The prime rate in Canada today, February 29, 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 February 14, 2023, the average of the Big 5 Banks' best, high-ratio, 5-year fixed mortgage rates in Ontario is 5.15%.
WATCH: January 24, 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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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.
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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%
January 24, 2024: Bank of Canada announcement highlights
On January 24, 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, namely weak GDP, softening consumer spending and a reduction in business investment. It noted, however, that despite the progress made in the fight against inflation, December’s CPI of 3.4% remained well above its inflation target of 2%, and declared that higher rates were therefore needed for longer.
- Although Canadians with variable-rate mortgages and home equity lines of credit (HELOC) will be pleased to see their rates remain stable, they are likely going to be disappointed not to find any language about upcoming rate cuts in the Bank’s commentary.
- While fixed mortgage rates are tied to the bond market rather than the Bank of Canada’s policy rate, in the wake of spiking yields caused by December’s higher-than-expected CPI report, many lenders had been holding their fixed rates in anticipation of new information from the Bank. However, given the absence of new information in the Bank’s commentary, lenders may now consider raising fixed mortgage rates.
- This announcement is unlikely to have much effect on the housing market, as it is basically a continuation of the “wait and see” approach adopted by the Bank in the last quarter of 2023. Should the Bank hint at rate cuts, we can expect to see an almost immediate rise in home prices.
Ontario housing market: February 2024 update
On February 14, 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 the Ontario housing market experienced a noticeable boost in activity after an anemic second half of 2023. Some 9,509 homes were sold across Ontario in January, marking a major annual increase of 21.4%, and substantially above than the previous month’s total of 7,723. Some 19,363 residential properties were newly listed in January, marking an annual increase of 7.5%, and more than double the previous month’s figure of 8,960.
The flood of new listings helped to balance the increase in demand; in fact, the average home price slipped slightly on a monthly basis, down to $821,624 from December’s figure of $853,915 (but still up by 2.9% annually).
Buying conditions remain firmly balanced in Ontario, with a sales-to-new-listings ratio (SNLR) of 50.2%. To put this in context, according to CREA, a SNLR within 40 - 60% indicates a balanced market, with above and below that threshold representing sellers’ and buyers’ markets, respectively.
Ontario home sales and price forecast
Following the steep declines in buyer demand in 2022, home sales in Ontario are set to perform slightly worse this year before improving significantly the next, according to an updated forecast from the Canadian Real Estate Association. According to CREA, a total of 182,866 properties sold last year, marking a -32.3% decline from 2021 numbers. So far, 2023 sales are on track to hit 175,646, which will come in -3.9% below last year’s already-low number.
This largely reflects the impact of rising interest rates this year and last, as the Bank of Canada hiked its trend-setting cost of borrowing benchmark a historic 10 times between March 2022 and July 2023, considerably increasing mortgage rates. However, in line with expectations that the central bank will ease off rate hikes in 2024, CREA is calling for sales to rebound by 13.3%, to 199,082 transactions.
The average Ontario home price, meanwhile, will end 2023 on a dip, coming in -3% below 2021 levels at $903,719. CREA forecasts this to flatten further into 2024 at an average of $910,205 (0.7%).
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.
Changes on the horizon
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