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On, customers can start an application for a number of different mortgage products. The two main types of mortgages you may apply for include conventional mortgages and high-ratio mortgages. A conventional mortgage means that the homebuyer has put at least 20% of the property’s purchase price down. With this type of mortgage, the homebuyer does not have to purchase mortgage insurance from the CMHC. A high ratio mortgage, on the other hand, is where homeowners put down less than 20% of the purchase price as a down payment, which means they’re required to purchase mortgage insurance from the CMHC. Below, you’ll see a comparison of high ratio mortgages and conventional mortgages in Ontario.

Conventional 5-year fixed mortgage rates vs. high ratio 5-year fixed mortgage rates in Ontario

DateAverage Conventional RateAverage High Ratio Rate
04/20 2.76%2.58%
05/20 2.40%2.26%
06/20 2.26%2.18%
07/20 2.10%1.96%
08/20 1.97%1.83%
09/20 1.90%1.77%
10/20 1.90%1.79%
11/20 1.85%1.71%
12/20 1.82%1.64%

Last Updated: January 1, 2021

Variable or fixed mortgage rates: which one is best?

When hunting for the best mortgage rates in Ontario, it’s important to compare different offers.

One question homebuyers continue to face: how do the current best variable rates compare to the best fixed rates?

To find the answer, we compared the 5-year fixed mortgage rates and 5-year variable mortgage rates that Ontarians have applied for on our site.

We discovered that whether you go with a fixed or variable rate on, you’re getting a great deal. Our 5-year fixed rates and our 5-year variable rates have been virtually neck-in-neck for the past year. Keep reading to learn more about the difference between fixed and variable mortgage rates.

5-year fixed vs. 5-year variable mortgage rates in Ontario

04/20 2.32%2.71%
05/20 2.07%2.37%
06/20 2.03%2.25%
07/20 1.82%2.03%
08/20 1.78%1.91%
09/20 1.74%1.84%
10/20 1.77%1.84%
11/20 1.74%1.77%
12/20 1.68%1.73%

Last Updated: January 1, 2021

Focus On

Ontario’s housing market.

Ontario is the most active housing market in the country. The price of a single-family home across several Ontario regions has exploded. The province’s most expensive housing market is currently the Oakville region, where the benchmark home price was over $1 million in January 2020. This region closely followed Toronto.

Single-detached family home prices by Ontario region


Last Updated: Dec. 30, 2020

Source: Zolo, and CREA

Single family homes aren’t the only form of housing that has seen rapid and consistent increases over the past few years. The value of condo dwellings and townhouses have also risen.

Condo prices by Ontario region


Last Updated: Dec. 30, 2020

Source: Zolo, and CREA

Townhouse prices by Ontario region


Last Updated: Dec. 30, 2020

Source: Zolo, and CREA

Your Ontario mortgage questions, answered.

Looking for mortgage info? Check out our Home Buyers Guide.

What’s the difference between a mortgage term and an amortization period?

Mortgage term: The mortgage term is the amount of time that you commit to your mortgage rate, lender and the terms and conditions of the contract. At the end of the term, you’ll renew your mortgage contract for the remaining principal at a new rate. The process repeats until you’ve paid off your mortgage. A mortgage term can vary in length, from six months to 10 years, with the most common term in Canada being five years.

Amortization period: The amortization period is the amount of time it will take you to pay off your entire mortgage. In Canada, the maximum amortization period is 35 years. But, if your down payment was less than 20% and you were required to purchase mortgage insurance from the Canadian Mortgage Housing Corporation, then your maximum amortization period is 25 years.

Variable or fixed: which is more popular?

What’s the difference between a fixed and variable mortgage rate? Essentially, a fixed rate means your interest rate doesn’t change for the duration of your mortgage term. A variable rate means that your rate is not fixed. Instead, the rate will be adjusted based on market conditions.

Up until 2019, the majority of users have taken 5-year variable rates. We discovered this after we analyzed data from hundreds of thousands of borrowers who have shopped for a mortgage on our site. That’s likely because 5-year variable rates have been significantly lower than 5-year fixed rates during that time frame, however, this trend appears to be reversing itself. Throughout 2019, fixed rates were consistently lower than variable rates.

What factors determine my Ontario mortgage rate?

Your down payment: The size of your down payment is the primary contributor to the size of your mortgage loan. It also factors significantly in determining your mortgage rate. The size of your down payment is a signal to lenders about how capable you are of paying off your mortgage. When it comes to down payments, the more you can put down, the better.

Your debt service ratios: Ontario lenders look at a number of other factors when calculating your mortgage rates. These are known as debt ratios and can be grouped into two categories:

Gross Debt Service Ratio (GDS): To calculate your GDS, lenders determine how much of your paycheque will go towards housing. This includes your mortgage, property taxes, heating costs and 50% of your condo fees (if applicable). The lender then divides this by your gross annual income. If the result is greater than 35%, your lender may doubt your ability to handle your monthly housing costs.

Total Debt Service Ratio: Your TDS ratio is everything that comprises your GDS ratio plus any other monthly payments you have to make. These could include things like credit card debt, loan payments and car payments. The total is divided by your gross annual income. If the resulting percentage is less than 42%, your lender will be confident that you earn enough to make all your monthly payments.

How can I get a cheaper mortgage rate in Ontario?

Shop around: While it can be tempting to take the first offer you receive, it’s important to shop around to really get a sense of the mortgage market. You’d think the bank you’ve been with for 10 years would give you a great rate for being a loyal customer, but the opposite is sometimes true: they’re not worried about you leaving any time soon, so they don’t feel pressure to keep your business.

Reduce your other debts: Ontario lenders will often take other, non-household related debts into account when determining whether you’ll be able to pay off your mortgage. One way to demonstrate that you’re a safe bet (and possibly secure a lower rate) is to lower your credit card and loan debt. These debts contribute to your total debt service ratio, as we explained above.

Use a broker: A mortgage broker knows the ins and outs of the Ontario mortgage market better than the average bank employee. Plus, they’re not tied to one institution; they can show you rates from a bunch of different lenders.. This also gives them a leg up when negotiating your mortgage contract with a lender. We’ll connect you to one when you compare quotes on our site.

How much does getting the best mortgage rate matter?

Getting the best mortgage rates is one great way to save money on your mortgage, but it’s one of many things you can do to increase the overall affordability of your mortgage. Some of these features might include prepayment privileges and portability.

What if I want to pay off my mortgage early? Or break it?

The answer to this question depends on the terms of your mortgage. In addition to securing a cheap mortgage rate, there are other factors it might be worth it to discuss to maximize your savings in the long run.

Prepayment privileges: Before signing on the dotted line, prepayment privileges are something you should discuss with your lender. Not all banks and brokers offer the same prepayment terms, however, so it’s important to raise the issue.

Penalties: If for whatever reason, you need to break your mortgage, you may be required to pay thousands of dollars in penalties. While you may wind up with a better rate if you choose to go with a different lender, it’s important to look at the fine print to ensure that it won’t cost you more than you’ll gain.

Portability: One way to avoid these penalties is to negotiate a portable mortgage. This means that if you move, you can transfer your mortgage to a new home and combine it with an additional mortgage loan.

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