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How comparing mortgage quotes works. Hint: it’s free!
First, choose whether you're buying a new home, refinancing or renewing, and fill in a few details. It only takes 3 minutes, and it’s 100% confidential.
Next, we’ll show you quotes from 75+ Canadian banks and brokers. It’s free, with no commitment.
When you find the best quote, secure your Toronto mortgage rate by talking to a licensed broker or agent.
Compare mortgage rates in Toronto.
Toronto is one of Canada’s most expensive housing markets. If you're trying to buy a home in the big city, you’re probably on the lookout for the lowest mortgage interest rate in Toronto you can find.
We can help with that. LowestRates.ca brings you the best mortgage rates from 75+ Canadian banks and brokers.
We shop the mortgage market for you by comparing mortgage rates not just in Toronto or Ontario, but across Canada.
All you have to do is fill out the form and you’ll be on your way to securing the cheapest Toronto mortgage rates. It's totally free, and you're not obligated to do anything.
Keep scrolling to learn everything you need to know about mortgage rates for a house in Toronto. And if you're eyeing a condo, like so many Torontonians, we didn't leave you out: the information below applies to condos, too.
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Current lowest posted bank rate
Conventional vs. high-ratio mortgages: which is cheaper?
Depending on how much of a down payment you have, there are two main types of mortgages you can apply for: a conventional mortgage or a high-ratio mortgage.
A conventional mortgage means the homebuyer has a down payment of at least 20% of the property’s purchase price. For example: If a home costs $850,000, the down payment would need to be at least $170,000 for a conventional mortgage. With this type of mortgage, the homebuyer doesn’t have to purchase mortgage insurance from the Canada Mortgage and Housing Corporation (CMHC).
A high-ratio mortgage, on the other hand, is where buyers put down less than 20% of the purchase price as a down payment. In this scenario, you’re required to purchase mortgage insurance from the CMHC. This type of insurance is to protect lenders if you stop making your mortgage payments and default on your loan.
Now to answer the question of which mortgage type is cheaper: it depends! The interest rates on high-ratio mortgages tend to be lower than the rates offered to buyers who can make a larger down payment. Why? Because they're insured by the CMHC, which lowers the amount of risk the lender takes on. No matter what, if you stop making mortgage payments, the lender will get their money back thanks to insurance.
However, the larger your down payment, the smaller your mortgage loan will be. This means your payments will also be smaller compared to someone with a high-ratio mortgage.
One thing's for sure, no matter which type of mortgage you go for, you can almost certainly find a better mortgage rate by comparing multiple lenders.
Conventional 5-year fixed mortgage rates vs. high ratio 5-year fixed mortgage rates in Ontario
Average Conventional Rate
Average High Ratio Rate
Last Updated: January 1, 2022
Fixed rate vs. variable rate mortgages: which is cheaper?
When looking for the best mortgage rates for homes in Toronto, you want to be aware of the options that best suit your needs. When it comes to mortgage rates, there are two types to choose from: fixed or variable.
A fixed rate doesn’t change for the entire length of your mortgage term. This means your rate is locked in and stays consistent for a specified number of years, regardless of changes in the market.
On the other hand, variable mortgage rates in Toronto will fluctuate based on changes in the market, including changes to the Bank of Canada’s overnight rate. The Bank of Canada’s overnight rate influences the interest rate lenders set for certain loans, including variable rate mortgages.
Fixed mortgage rates in Toronto are usually higher, but can be attractive to buyers who want consistency throughout their term.
5-year fixed vs. 5-year variable mortgage rates in Ontario
Last Updated: January 1, 2022
Factors that affect your Toronto mortgage rate
Before you start searching for your dream home or condo, it’s a good idea to sit down and take a good look at your financial situation. There are a number of factors that mortgage companies in Toronto consider before approving your application. Understanding what lenders look at to calculate your Toronto mortgage rate can help you secure the lowest possible interest rate.
Down payment: If you’re looking to buy a home or condo in Toronto, chances are you already know that you need a down payment. A down payment is the amount of money you pay right off the bat toward the price of your home. This is one of the most important factors, because it determines the size of your mortgage. In Canada, the federal government requires a minimum down payment, depending on the price of the home.
For a home that costs less than $500,000: the minimum down payment is 5%
For a home that costs $500,000 to $999,999: the minimum down payment is 5% on the first $500,000 and 10% on the amount above $500,000
For a home that costs $1 million or more: the minimum down payment is 20%
Debt service ratios: It’s your lender’s responsibility to assess your finances to determine if you’re a good candidate for a mortgage — and if you can afford the property. To measure the amount of debt you have relative to your income, they use two debt ratios:
Gross debt service ratio: This is the percentage of your monthly household income that goes toward housing costs. This includes the mortgage payment, property taxes, condo fees (if applicable), heating and utilities. According to CMHC guidelines, housing costs should not surpass 35% of your monthly income.
Total debt service credit ratio: This ratio covers all other monthly debt payments (including housing costs), including things like credit card debt, lines of credit, alimony and child support, car loans and student debt. Your total debt service ratio should not exceed 42%.
Credit score: Your credit score is one way for lenders to know whether or not you’re a responsible borrower because it gives a glimpse into how you’ve historically handled paying off your debts. If you have bad credit, that may be used against you and you may not be approved for a mortgage. In general, a score of 650 is considered “good credit.”
Employment and income: Your employment status is an indicator of whether or not you’ll be able to come up with the funds to pay your mortgage. To secure a mortgage loan in Toronto, you’ll have to prove that you have the financial stability to make payments ongoingly. Lenders will look at whether you’re employed full time, part time, temporarily, seasonally or on contract. A lender will want to know your total income from all sources (a salaried job, investments or rental income) to make sure that the size of your mortgage will be manageable.
Self employment: If you work for yourself, you’ll need to provide supporting documents to prove your income and cash flow. For self-employed people applying for a mortgage, you’ll need to provide at least three years’ worth of tax returns and other documents such as bank statements that show income and expenses, articles of incorporation, business or GST licence for your business and your personal and business credit score.
Typical mortgage amount in Toronto
A “typical” mortgage size for Toronto depends on the amount of your down payment and the price of the home. Unless you’ve saved up a substantial down payment, the size of a mortgage in Toronto will likely be much higher compared to other cities.
The benchmark price for a single-family home in the Greater Toronto Area (GTA) is $1,074,600 as of January 2021, according to data from the Canadian Real Estate Association (CREA). At that price, a 20% down payment would be $214,920. That means the remaining mortgage balance would be $859,680.
This mortgage cost also doesn’t include the total paid in interest over time because that would depend on the buyer’s mortgage rate, type and amortization period. If your down payment is less than 20% of the home’s price and you need to buy mortgage insurance, that would bump up the cost.
Toronto’s housing market and home prices
The housing market in Toronto has been booming for years, and is usually neck-in-neck with Vancouver for Canada’s most expensive housing market. That extends to the (GTA), which has roughly 6.4 million residents and includes the Durham, Halton, Peel and York municipalities.
During 2020, benchmark prices for single-family detached homes steadily climbed toward the million-dollar mark. Between January 2020 and January 2021, the benchmark price for a single-family home in the GTA increased by 16% from $921,600 to $1,074,600, according to CREA data. Within the city of Toronto, the average price for a detached home is $1,369,848 as of January 2021, according to the Toronto Real Estate Board (TREB).
Other forms of housing, such as townhomes and condos are also seeing changes. According to TREB, the average price for a condo in Toronto reached $679,182, in January 2021, up 15% year-over-year. Meanwhile, the benchmark price of a townhouse was $782,274, down 1.9% from the same time last year.
Toronto closing costs and land transfer tax
As with many things, extra little fees and costs add up. If you’re buying a home in Toronto, you need to have money for more than just the down payment and mortgage fees. Below is a list of costs to budget for and plan for in advance. In preparing for closing day, experts recommend stashing aside 1.5% to 4% of the purchase price for these additional costs:
Mortgage default insurance (if applicable)
Property valuation fees
Home inspection fees
Provincial sales tax (PST) on CMHC insurance (in Ontario, it’s 8%)
Good and services tax (GST) or harmonized sales tax (HST) if you’re buying a brand new home or condo
Toronto is unique in that it charges home buyers a municipal land transfer tax on top of the Ontario provincial land transfer tax. Ontario’s land transfer tax is based on the value of your property. Here’s how the provincial land transfer tax is calculated:
$2 million +
The City of Toronto’s land transfer tax is calculated the same way as the provincial one. So if you’re buying a home within Toronto city limits, you’re going to pay a double land transfer tax.
Information for first-time home buyers in Toronto
Banks vs. brokers: When looking for the lowest mortgage rates in Toronto, you’re going to need to shop around and do adequate research. One decision that homebuyers will have to make is whether to use a bank or a broker. So what’s the difference between the two? A bank is a lender and they can give you only the mortgage products offered by that specific financial institution. A broker on the other hand, is like a personal shopper who works with different lenders to find you the option most suitable to your needs. Note that a broker can find you the best bank mortgage rates in Toronto, but the mortgage itself doesn’t actually come from the broker.
Tax credits: Buying a home in Toronto is expensive, but you may qualify for a few different tax credits.
First Time Home Buyers’ Tax Credit: If you’re a first-time homebuyer purchasing your new digs in Toronto, the federal government offers a non-refundable tax credit of $5,000. This credit is available across Canada. To qualify, you must be a citizen or permanent resident, at least 18 years old, you must occupy the home for the first nine months and neither you nor your spouse can have owned a home anywhere in the world.
GST/HST New Housing Rebate: If you buy a new or substantially renovated home or condo in Ontario, you could qualify for the New Housing Rebate. This can be used by a person to recover GST or HST but only applies if the home is being used by the individual as their primary place of residence.
Federal Home Accessibility Tax (HATC) for Seniors and Persons with Disabilities: Individuals who either have a disability or are age 65 or older at the end of the tax year qualify for the HATC tax break. This break allows you to claim up to $10,000 on renovations, repairs or work performed on your primary residence.
Municipal Land Transfer Tax Rebate: First-time homeowners in Toronto can qualify for a rebate up to $3,725. To apply, the criteria is the same as the federal First Time Home Buyers’ Tax Credit. There’s one difference: a buyer can apply if they become a Canadian citizen or resident within 18 months of the land transfer, despite not having citizen or resident status at closing time.
Home insurance: While home insurance isn’t a legal requirement, it will be hard to obtain a mortgage without it. A house is an expensive asset, and most lenders will want assurance that you’re protected in case of accidental damage to your home. Remember: your lender has a financial stake in your home or condo, so they need to know that you’re prepared for worst-case-scenario events.
Your questions about Toronto mortgages, answered.
What’s the difference between a mortgage term and an amortization period?
For first-time buyers, the terms and definitions around buying your house or condo can be a little confusing. One of the most misunderstood concepts is the mortgage term vs. the amortization period.
Mortgage term: The term is the amount of time certain conditions are locked in, such as your interest rate. Terms usually run from six months to 10 years, but five years is the most common mortgage term in Canada. By the end of the term, the mortgage must either be fully paid off or you must get a new term, with new conditions.
Amortization period: Amortization is the total amount of time it takes to pay off your mortgage in full. In Canada, an amortization period can be up to 30 years. If your down payment is less than 20%, the maximum amortization period allowed by the CMHC is 25 years. A shorter amortization period means your monthly payments will be higher, but you’ll pay less interest. A longer amortization period means your payments will be lower, but you’ll pay more toward interest charges over the life of your mortgage.
What’s the difference between an open mortgage vs. a closed mortgage?
When securing a mortgage, one of the many decisions you’ll have to make is whether you want an open mortgage or a closed one. How do they differ?
Closed mortgage: A cut-and-dry, non-flexible contract in which you’re not allowed to make additional payments or increase the amount of your mortgage payments. You also won’t be able to negotiate any terms or pay the entire mortgage off before the end date of the mortgage term.
Open mortgage: This type of mortgage has wiggle room and flexibility, and allows you to make additional payments on your mortgage if you want to. The downside? Open mortgages typically have higher interest rates.
How much does it cost to live in Toronto?
Along with Vancouver, Toronto is one of the most expensive cities in Canada. LowestRates.ca calculated the cost of living in the City of Toronto depending on whether you own a home, rent, drive or take public transit.
We found that in order to own a home in the city, residents will pay over $4,000 per month in housing costs, not including the land transfer tax that’s paid in full at the time of the transfer of the deed. In order to own a home and a car in the city, residents will need to earn $94,000 before taxes. Residents who own just a home and opt to take public transit will need to earn at least $88,000 per year.
How much does getting a lower interest rate matter in Toronto?
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.
Prepayment privileges: Not all banks and brokers offer the same prepayment terms, however, so it’s important to raise it before you sign your contract. Before signing on the dotted line, prepayment privileges are something you should discuss with your lender.
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.
Your questions about LowestRates.ca, answered.
How are mortgage rates determined on LowestRates.ca?
LowestRates.ca works with 75+ banks and brokers across the country to bring you the best rates for homes in Toronto. We work with our partners to obtain their best deals and offers, and then we let them compete for your business. All you have to do is answer a few questions, and in minutes you’ll be provided with today’s mortgage rates for Toronto. There’s no obligation, but you can choose to speak with our broker partner to secure your best rate and see if you're eligible for more savings.
Is it safe to get a mortgage online?
Yes, it’s safe — you no longer need to visit a bank branch or mortgage broker’s office in person to apply for a mortgage. It’s becoming increasingly common for Canadians to apply for mortgages online. LowestRates.ca only works with reputable, trustworthy financial institutions. Your credit score won’t be affected and your information is secure. We don’t share your information with anyone unless you want to connect with a mortgage broker. We take care of the heavy lifting by comparing the market for you and can connect you with the best mortgage lenders not only in Toronto, but across the country.
How do I know I’m getting the lowest rate?
We have a strong selection of lenders on LowestRates.ca, including the big banks and many independent providers, and we’re adding more lenders all the time. This ensures we’re always delivering you a competitive rate. Even if you’re not ready to commit to anything, you can use our site as a starting point for research (it’s totally free, and you’re under no obligation).
The better informed you are, the more likely you'll negotiate a better deal for yourself. And, really, that’s what we care about the most.
About the Author
Jessica is the former Associate Editor for LowestRates.ca. Before joining the team, Jessica worked as a National Online Journalist with Globalnews.ca and previously spearheaded the launch of the Business Section at one of Canada's largest technology websites, MobileSyrup.
If you have a sneaking suspicion that everything is more expensive these days, you’re right. Canada’s inflation rate hit an 18-year high in October of last year, sending consumer prices soaring. So much so that the cost of living has increased by nearly 5%, according to Statistics Canada.