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Ontario’s Best Current Mortgage Rates

Compare customized mortgage rates from Canada’s top lenders to find the best mortgage rate for your needs.

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Editor’s Note: The Bank of Canada will make its next overnight rate decision on Wednesday, July 24. Economic indicators like employment and inflation signal that the Bank might be gearing up for another overnight rate reduction. In June, the BoC’s first rate cut in four years brought the overnight rate down to 4.75%, providing minor relief to homeowners with variable rate mortgages. A second consecutive cut could make variable mortgage rates even more attractive. NerdWallet will make updates as more information becomes available. 

Nerdy Insight: The best Ontario mortgage rates have been stable in July. Three- and five-year fixed mortgage rates remain comfortably below 5%, but current activity in the government bond market could open the door to lower rates. Variable mortgage rates will remain around 6% until the Bank of Canada lowers its overnight rate. That could happen on July 24.

The best fixed and variable mortgage rates in Ontario

Rates updated:

Showing 7 of 40 results

Term

Lender

Rate

Monthly Payment

 

6 Months Fixed Rate


Marathon Mortgage

4.54%

$2,500.64

5 Year Fixed Rate


Desjardins

4.64%

$2,525.77

4 Year Fixed Rate


Desjardins

4.69%

$2,538.38

5 Year Fixed Rate


Marathon Mortgage

4.69%

$2,538.38

5 Year Fixed Rate


B2B Bank

4.69%

$2,538.38

5 Year Fixed Rate


FirstOntario Credit Union

4.74%

$2,551.02

5 Year Fixed Rate


Neo Financial™

4.74%

$2,551.02

Disclaimer: The rates displayed do not include any taxes, fees, insurance, or other additional charges. These rates are estimates and are not guaranteed. The actual rate and loan terms you receive will depend on our partner’s assessment of your creditworthiness, loan amounts, and other relevant factors. Please note that any potential savings figures provided are estimates based on the information you and our advertising partners have provided. Terms and conditions apply.
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Ontario mortgage rate update: July 2024

Fixed mortgage rates are holding steady in Ontario. As of July 12, 2024, five-year fixed mortgage rates remain below 4.7% at some lenders, while three-year fixed mortgage rates can still be found for around 4.9%.

Recent activity in the government bond market, where bond yields have been sinking, could open the door for lenders to improve their fixed rate offers later this month,

Variable mortgage rates remain well below 6% at many lenders after the Bank of Canada cut its overnight rate in June. If the Bank reduces the rate again on July 24, variable mortgage rates should follow suit the next day.

The average mortgage rate in Ontario

Ontario doesn’t have a single average mortgage rate. Even if you could access all the current mortgage rates on offer, it wouldn’t be much help. That’s because any mortgage offer you receive is always specific to you. Lenders take into account multiple factors, such as credit score, the type of mortgage and the amount needed.

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.

2024 Ontario mortgage rate forecast

Variable mortgage rates

After the Bank of Canada’s decision to lower its overnight rate on June 5, variable mortgage rates are finally set to drop a bit. A reduction in the overnight rate typically leads to an identical decline in lenders’ variable rates. 

How many times variables dip in the last half of 2024 remains to be seen. The Bank of Canada will be cautious about cutting the overnight rate too quickly, which could trigger another rise in inflation. Another two modest cuts by year end is a reasonable expectation.

Fixed mortgage rates

Because they’re driven by lenders’ reactions to activity in the government bond market, fixed mortgage rates can be difficult to predict over the long-term.

Based on bond activity in the latter half of February 2024, for example, lenders could drop their three- and five-year fixed mortgage rates moderately in March, but there weren’t many bargains on offer at the time of this writing.

Fixed mortgage rates could be somewhat lower by the end of 2024, but it’s unlikely that they’ll fall significantly below 5%. 

Calculators to inform your home buying decisions

Ontario housing market update: July 2024

Home buyers in Ontario are having trouble keeping up with high prices and high mortgage rates. Home sales dipped more than 15% year-over-year in June, according to the Ontario Real Estate Association. Sales were well below the five- and 10-year averages for the month, which has to be disappointing for sellers, who continued adding new inventory to the market. New listings were 5.1% higher compared to June 2023, while active listings increased by more than 52%.

The average sale price in the province was $884,761, down 2.3% from a year ago. The average price in the Greater Toronto Area was $1,162,167.

Ontario home sales and price forecast

Real estate experts predict a more normal real estate market in 2024, though the bar for “normal” is low given the tumult of 2023. Many believe Bank of Canada interest rate hikes — a primary driver behind last year’s affordability crunch — are largely over. But exactly when and how quickly the Bank begins to taper interest rates down remains an important question mark.

A report released by real estate company Royal LePage forecasts home prices increasing about 5% by the end of the year, with most of that increase taking place in the second half of 2024. RE/MAX Canada suggests a more subdued average price increase of less than 1%. 

Toronto home prices will rise about 6% in 2024, according to the Royal LePage report, and the average price for a single-family home will approach $1.5 million. One possible bright spot in the market could be an increase in housing supply, as mortgages taken out during low-rate environments expire and owners feel more willing to list. This may give buyers more options, however don’t expect it to push prices down.

Ontario first-time home buyer programs

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 $4,000 refund on your municipal land transfer tax.

Other 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. 

Ontario land transfer taxes

Land transfer tax is an unavoidable cost when buying a house in Ontario. The amount you’re charged is based on your home’s value.

You’ll pay:

And if you’re buying in Toronto, you’ll pay a municipal land transfer tax as well.

Guide to Ontario mortgage rates

Types of lenders in Ontario

Mortgage lenders in Ontario tend to fall into four categories, which include:

Types of mortgages in Ontario

Fixed-rate mortgages

The interest rate stays the same for the duration of the mortgage term in a fixed-rate mortgage, even if the market fluctuates. Fixed rates typically:

Variable-rate mortgages

Variable mortgage rates increase or decrease whenever your lender’s prime rate increases or decreases. Variable-rate mortgages typically have rates that:

» MORE: The difference between fixed- and variable-rate mortgages

Hybrid-rate mortgages

A portion of your mortgage is subject to a variable rate and another portion is at a fixed rate of interest. These mortgages:

Insured and uninsured mortgages

If you buy a home for under $1 million, and your down payment is under 20%, you must insure your mortgage. Mortgage insurance adds to the cost of your loan. The cost of insurance equals a percentage of your mortgage, and the percentage depends on your down payment. The closer it is to 20%, the smaller your insurance payment is.

Homes worth $1 million or more require a down payment of at least 20%, so insurance is not required. 

Short-term and long-term mortgages

Short-term mortgages last five years or less. Long-term mortgages last over five years. With a shorter mortgage, you’ll need to renew sooner, which can provide flexibility. Short-term mortgages often have lower interest rates than long-term mortgage rates.

Closed and open mortgages

The primary difference between closed and open mortgages is that you can pay off an open mortgage whenever you like and not pay a penalty. If you have a closed mortgage and make additional payments, you’ll generally be penalized.

Closed mortgages often offer better rates than open mortgages. But open rate mortgages may be a good option if you think you may be able to pay off your mortgage early.

» MORE: Understanding open and closed mortgages

How Ontario lenders determine mortgage rates

The mortgage rate you’re offered in Ontario will be based on two primary factors; one based on the state of the economy and one based on 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:

Lenders look for signs of risk when assessing these aspect

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. For example, you can:

Factors that affect mortgage affordability in Ontario

A home’s price and the rate you’re offered aren’t the only factors that affect how much mortgage you can afford. You’ll also have to account for the following components, which play a role in all mortgages.

Debt service ratios

Lenders use debt service ratios to determine how much of your income goes toward paying debt. If those ratios are too high, you may not qualify for the mortgage amount you need.

Car loans, credit cards and lines of credit are all examples of debt that require regular payments. Decreasing some of these balances, or relying less heavily on credit, can help you lower your debt service ratios. 

The mortgage stress test

You will have to pass the mortgage stress test if you want a home purchase funded by a federally regulated financial institution.

The rules of the stress test say you must qualify for a mortgage at a minimum qualifying rate of either 5.25% or the rate you’re offered plus 2%, whichever is higher. If a lender offers you a rate of 5%, for example, you’ll have to demonstrate you can afford the same mortgage at 7%.

You may be able to avoid the stress test if you apply for a mortgage with a lender that is not federally regulated, like a credit union.

Your down payment

Your down payment is a critically important factor in determining mortgage affordability. The more you can put down, the less you’ll need to borrow. Your monthly mortgage payment will likely be smaller, and you’ll pay less in interest. 

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. Once your mortgage term ends, you can pay your loan off in full, renew it or refinance it.

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 longer amortization period? The longer your mortgage lasts, the smaller your monthly payment will be. You’ll pay more in interest, but that might be a worthwhile trade-off if it helps you keep your home.

How to compare mortgages from Ontario lenders

Use APR for greater accuracy

The annual percentage rate (APR) includes fees and closing costs the lender may charge in addition to the interest rate. A lender offering the lowest rate may actually have a higher APR due to those additional costs. Comparing APRs is the easiest way to see the complete cost of each offer.

Compare similar mortgages

For a comparison to be useful, the mortgages should have the same term, amortization period and payment frequency. 

When looking for the best mortgage rates in Ontario, also consider:

You can also compare mortgage rates in other provinces to get a sense of how the rate you’ve been offered in Ontario stacks up:

Working with a mortgage calculator can help you compare different mortgages in a single place.

Mortgage shopping is about more than just the interest rate

A low mortgage rate is usually a primary objective for buyers, but getting the lowest rate doesn’t necessarily mean you’re getting the best mortgage for your needs.

For example, you might opt for a fixed rate, which has a higher rate than a variable rate, if you’re uncomfortable with the risk of rates rising.

Or, if you expect to come into a sizable sum of money soon (via an inheritance, for example), paying a higher rate for an open mortgage, which allows you to pay it off early without penalties, could be worth it.

Frequently asked questions about Ontario mortgage rates

What’s a good mortgage rate in Ontario right now?

As of July 2024, you can still find fixed mortgage rates for well below 5% and variable mortgage rates for less than 6%. The rate you’re offered will ultimately depend on factors like your credit score, total debt level and income.

Will Ontario mortgage rates go down in 2024?

Mortgage rates should decline at least somewhat in 2024. Variable mortgage rates dipped after the Bank of Canada decreased its overnight rate on June 5, but it’s hard to know how many more rate cuts are on the way. Fixed mortgage rates should settle somewhere between 4% and 5% for the remainder of the year, but because fixed rates are determined by movement in government bond yields, they can be hard to predict over the long term.

DIVE EVEN DEEPER

Ontario First-Time Home Buyer Guide

Ontario First-Time Home Buyer Guide

First-time home buyers in Ontario should prepare for a competitive market by getting their finances in order and exploring grant and assistance programs.

Compare the Best 5-Year Fixed Mortgage Rates in Canada

Compare the Best 5-Year Fixed Mortgage Rates in Canada

Compare customized 5-year fixed mortgage rates from Canada’s best lenders and brokers for free. Find the lowest mortgage rate and apply for the home loan that best fits your needs.

Calculator: How Much Mortgage Can You Afford?

Calculator: How Much Mortgage Can You Afford?

Use our mortgage affordability calculator to see how your interest rate, down payment and debt ratios affect your housing budget.

Canada Closing Costs Calculator

Canada Closing Costs Calculator

Create a more accurate home buying budget by estimating your closing costs — the one-time, upfront expenses you’ll pay before receiving the keys.

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