Best Mortgage Rates in Ontario
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Ontario mortgage rate update: May 2025
Mortgage rates in Ontario have been fairly stable in May. Since there’s no Bank of Canada interest rate decision scheduled this month, most recent rate movement has been limited to fixed rates.
And it’s not as if fixed rates are all that volatile. There have been some marginal increases in three- and five-year fixed rates at some lenders, but mortgage brokerages are still offering fixed rates for below 4%. As of May 13, 2025, you can find three-year fixed rates for as low as 3.69% and five-year fixed rates for 3.99%.
Fixed rates are more likely to increase than decrease in the coming weeks. Government bond yields, which determine fixed mortgage rates, have been slowly edging upward. When yields increase over a sustained period of time, lenders typically respond by raising their fixed rates.
The best variable mortgage rates in Ontario, which are currently around 4%, should be stable until at least June 4, when the Bank of Canada is scheduled to make its next rate announcement. The Bank is expected to reduce its overnight rate by 0.25%, which would reduce variable mortgage rates by the same amount.
Read more about the Bank of Canada's latest rate announcement.
The BoC makes policy interest rate announcements eight times a year. Here's what you need to know.
Historical trends in Ontario mortgages
The average mortgage rate in Ontario
There’s no single average for mortgage rates in Ontario. Even if you had access to all the current mortgage rates being offered by lenders in Ontario, it wouldn’t be much help when you’re mortgage shopping. That’s because the mortgage offer you receive is always specific to you and takes into account multiple factors like your credit score, the type of mortgage you want and the amount you need to borrow.
Think about the “average mortgage rate” the way you would Ontario’s average home price. It’s interesting data to have, but it’s not necessarily relevant to your own home buying journey.
Ontario mortgage rate forecast: Will rates keep going down in 2025?
Variable mortgage rates
After the Bank of Canada’s fifth consecutive overnight rate cut on December 11, 2024, variable mortgage rates were down 1.75% since June. That’s a lot of action from a central bank with a conservative reputation.
The Bank likely won’t be as aggressive in 2025, as it has to wait for its most recent cuts to work their way through the economy. The overnight rate might decrease by another 50 basis points in the first half of 2025, which would bring variable mortgage rates down by another 0.5%.
Fixed mortgage rates
Because they’re determined by the government bond market, which is driven by investors’ decisions, fixed mortgage rates can be difficult to project over the long-term.
The mortgage brokers NerdWallet spoke to at the end of 2024 all expect fixed mortgage rates to remain relatively static for the next several months. That assumption, however, flies in the face of evidence from the government bond market. Bond yields, which determine fixed mortgage rates, cratered for three weeks straight starting on November 21. When yields fall consistently, it gives lenders the wiggle room to lower their fixed rates.
So, fixed rates could fall to begin the year, but lenders might keep them at current levels for a strategic reason: Lower fixed rates might entice home buyers away from the more expensive variable-rate mortgages they’ve been gobbling up to end 2024.
Ontario housing market update: April 2025
Tariffs and the resulting economic uncertainty weighed heavily on Ontario home buyers in April, with home sales dropping 20.2% compared to April 2024, according to the Ontario Real Estate Association.
Sales prices also dipped to $859,645, a 4.8% drop from a year ago. The average price in the Greater Toronto Area stood at $1,121,010.
Buyers who continue their search may be rewarded by those slightly lower prices and a big increase in options: There haven’t been this many active listings in April in a decade.
Ontario home sales and price forecast
The Canadian Real Estate Association’s most recent housing market forecast, released on April 15, contained mostly downgraded expectations. In Ontario, CREA’s year-over-year sales activity estimate for 2025 was revised down, from a 10.4% increase to a 4.2% decrease. The projected average sale price for the province also declined, from $881,039 to $865,060.
Ontario first-time home buyer programs
Areas including Waterloo, the County of Simcoe, Kingston and Chatham-Kent have home buyer assistance programs that can keep costs down.
Land transfer tax refund
When buying your first home in Ontario, you can claim a refund up to $4,000 of land transfer taxes. If you’re a first-time home buyer in Toronto, you may qualify for a $4,475 refund on your municipal land transfer tax.
Ontario land transfer taxes
Factor in the land transfer tax when buying a house in Ontario. The amount you’re charged is based on your home’s value.
You’ll pay:
0.5% on the first $55,000 of the home’s value.
1.0% on additional value that’s more than $55,000 and up to $250,000.
1.5% on additional value that’s more than $250,000 and up to $400,000.
2.0% on additional value that’s more than $400,000.
2.5% on additional value that’s more than $2,000,000 if the land contains one or two single-family residences.
And if you’re buying in Toronto, you’ll pay a municipal land transfer tax as well.
Crunch the numbers with our mortgage calculators
Guide to Ontario mortgage rates
Types of lenders in Ontario
Mortgage lenders in Ontario tend to fall into four categories, which include:
Large chartered banks such as Scotiabank, RBC and TD.
Credit unions such as Northern Credit Union and Alterna Savings.
B lenders that work with borrowers with lower credit scores, such as MCAN and Equitable Bank.
Private lenders, who typically deal with borrowers in need of short-term funding.
How Ontario lenders determine mortgage rates
The mortgage rate you’re offered in Ontario will be based on two primary factors; the state of the economy and your financial situation.
Economic factors
Variable mortgage rates are influenced by the Bank of Canada’s overnight rate. When the overnight rate increases or decreases, a lender’s prime rate follows suit. Variable mortgage rates are based on a lender’s prime rate, so as the prime rate rises or falls, so do variable rates.
Fixed mortgage rates are determined by activity in the government bond market, particularly the yields on one-, three- and five-year bonds. Fixed mortgage rates follow the movement of those yields.
Your financial situation
Factors specific to you also affect the rates you’re offered. These include:
Your credit score.
Your income.
Your total debts.
The loan type you choose.
The amount you’re borrowing.
The term length and amortization period of your loan.
How to qualify for a lower mortgage rate in Ontario
Some factors behind rates are beyond your control, but there are steps you can take to possibly qualify for the best mortgage rates, including:
Improve your credit score. A higher credit score generally results in better offers. Get a better score by eliminating existing debt and paying future bills in full and on time.
Increase your income. It’s not always easy, but any additional income will improve your financial position. Lenders look at your income to assess your ability to afford a mortgage.
Decrease your total debts. Pay down personal loans, student loans or other types of debts. Lenders consider your total debt load when determining the details of your loan.
Consider all your options. See if adjusting the loan type, the term length or the amortization period of your loan could help.
Other factors that affect mortgage affordability in Ontario
Mortgage term
The term is the length of time your mortgage contract is valid. In Canada, mortgage terms can run anywhere from six months to as long as 10 years.
Chances are that your mortgage will have multiple terms during the amortization period until you pay it off in full.
Amortization period
A mortgage’s amortization period is the time it will take to pay off the loan in full. In Canada, the most common amortization period is 25 years. If your down payment is less than 20%, you can’t have an amortization beyond 25 years.
If your down payment is greater than 20%, you may find some lenders willing to offer amortization periods of up to 35 years.
Why would you want a shorter amortization period? You’ll pay less interest overall and potentially save thousands of dollars. A shorter amortization period, however, will result in higher monthly payments.
Frequently asked questions
Will Ontario mortgage rates go down in 2025?
Will Ontario mortgage rates go down in 2025?
Mortgage rates may decrease further in the first half of 2025. The Bank of Canada might reduce its overnight rate again in June, which would lower variable mortgage rates by 0.25% versus today’s levels. Fixed mortgage rates will likely continue hovering between 3.75% and 4.25% for much of the year.
What's a good mortgage rate in Ontario right now?
What's a good mortgage rate in Ontario right now?
As of May 2025, you can find three-year fixed mortgage rates for around 3.7% at some mortgage brokerages, while five-year fixed rates and variable rates are closer to 4%. The rate you’re offered will ultimately depend on factors like your credit score, total debt level and income, and whether you apply for your mortgage with a Big Six bank or through a broker.
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