Let's help you find the best mortgage rate in Ontario

Ontario is a big province, and there is a wide range of mortgage products and providers available for Ontario homeowners. Of course, having options is wonderful, but too many options can make choosing the right one difficult!

At Ratehub.ca, we help you find and compare the lowest rates from the Big 5 Banks, small banks, credit unions and Ontario’s top mortgage brokers, at no cost to you. Using our rate tables, you can compare the most current mortgage rates instantly, all in one place. By shopping around for the best mortgage rates in Ontario, you could save yourself 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 House Price: $1,052,920 in Q1 of 2022, an 18.3% year-over-year increase
• Average Household Income: $74,287
• Percentage of Homeowners: 70%

Fun Facts About Ontario 

• Ontario has around 250,000 lakes, accounting for about 20% of the world’s freshwater.
• Ontario is home to the University of Toronto, ranked the best university in Canada and one of the top 10 universities in the world.
  
  

What is the best mortgage rate in Ontario?

The best mortgage rate is one that meets your needs and best fits your financial situation. Sometimes the lowest rate is not what’s best for your personal situation.  The most important things for you to consider are: how much you can put in for your down payment, your current income, how your household income may change over the next few years, your debts, your credit score and your employment status.

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 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.
  
  

Historical trends in Ontario mortgage rates 

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

Source: Ratehub Historical Rate Chart

 

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 homebuyer programs

In an effort to make it easier for first-time homebuyers 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 Homebuyers 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 Homebuyers 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 Homebuyer 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.

The Ontario housing market

The Ontario housing market is greatly skewed by Toronto and Ottawa. The Greater Toronto Area is Canada’s largest population centre, and Toronto is one of the most expensive cities in the world to buy a home. Ottawa, as Canada's capital city, has more inflated prices than most comparable cities. Outside of these two cities, Ontario’s housing market is more similar to the rest of Canada.