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Rates in Toronto

Current Mortgage Rates in Toronto

As of Wednesday, October 28, 2026, current interest rates in Toronto are 4.59% for a 5-year fixed mortgage and 4.54% for a 3-year fixed mortgage. Shop around for mortgage rates to find the best offer.

High interest rates continue to make it challenging to qualify for a mortgage, making it harder for Toronto residents to afford a home. While it’s almost impossible to predict when rates will come down meaningfully, experts forecast that we should expect a gradual reduction over the next few years. 

Home prices remain high, with CREA reporting that the national average home price decreased 3.3% year-over-year to $665,600 in $651,400 $651,400. Ontario’s average price decreased 4.6% year-over-year to $753,300. As for Ontario’s largest city, the average selling price of a home in Toronto decreased 5.4% year-over-year to $940,800. 

Toronto Mortgage Rate Trends: October 2026

Bank of Canada Rate Announcement

The Bank of Canada (BoC) raised its policy rate by 25 basis points to 2.25% at its October 28 announcement, its first increase since July 2023 after seven consecutive holds. Governing Council said it raised the rate “to reduce the risk that continuing high energy prices spread broadly to the prices of other goods and services.” In its October Monetary Policy Report, the Bank raised its inflation outlook: CPI inflation is expected to rise to about 3.5% by the end of the year, average 3% in 2027, a percentage point above its July projection, and come down to 2% in the middle of 2028. It also revised growth up to 1% in 2026 and 2% in 2027 and 2028.

The Bank left the door open to further increases: “There could be a need to increase the policy rate further, but given uncertainties, Governing Council agreed to proceed carefully.” Governor Tiff Macklem said Governing Council would take future decisions “one meeting at a time.” Bond markets are pricing in a 25-basis-point hike at the Bank’s December 9 announcement at 99%, against 1% probability for a hold. That decision comes without a new Monetary Policy Report, so the October jobs report on November 6 and the October inflation report on November 16 carry more weight. On inflation expectations, the Bank said, “near-term household and business inflation expectations have risen, while longer-term inflation expectations remain well anchored.” Markets imply 50% chance for a hike by January 27.

A Bank of Canada decision affects fixed and variable mortgages differently. If you hold a variable-rate mortgage (VRM) or an adjustable-rate mortgage (ARM), a rate change flows through directly, adjusting your principal-and-interest split (VRM) or your monthly payment itself (ARM), within days of your lender updating its prime rate. If you hold a fixed-rate mortgage, nothing changes until your term ends, since your rate and payment are locked for the full term. Either way, the next decision, on December 9, is the one to watch if you’re renewing or shopping for a new mortgage soon.

GDP and Jobs Update

Statistics Canada reported that real GDP was unchanged in July, after June was revised up to 0.4%, and its advance estimate points to a 0.2% gain in August. Second-quarter growth stands at an annualised 3.3%, and first-quarter growth was revised to an annualised 0.3% gain, so Canada did not enter a technical recession. The Bank of Canada estimates third-quarter growth at about 2% and expects growth to slow in the fourth quarter as new US tariffs weigh on activity. The labour market has cooled further: the Labour Force Survey showed employment down 68,000 in September, a second straight monthly decline following August’s 42,000 drop, while the unemployment rate edged up to 6.5% from 6.4%. Average hourly wages rose 2.3% from a year earlier, up from 2% in August. August GDP arrives on October 30, and October jobs data follow on November 6.

Real Estate Market Update

The Canadian Real Estate Association (CREA) reports that national home sales fell 2.3% month over month in September 2026 on a seasonally adjusted basis, after a four-month run of modest gains, with actual sales 7.7% below September 2025. New listings fell 1.8% from August, and the sales-to-new-listings ratio eased to 48.8% from 49.1%, in balanced territory but below its long-term average of 54.7%. The MLS Home Price Index edged down 0.4% from August and stood 3.4% below September 2025, while the national average home price was $666,538, down 1.6% from a year earlier. Just over 200,000 properties were listed for sale, up 1.8% from last year, equal to 4.9 months of inventory and in line with the long-term average. CREA’s chair, Garry Bhaura, said the latest jump in fixed mortgage rates makes the mortgage side harder for prospective buyers but should also mean more homes to choose from and more negotiating power. CMHC reported that housing starts rose 3% in September to a seasonally adjusted annual rate of 248,896 units, up from 242,223 in August. However, new housing starts in urban centres with 10,000 or more inhabitants were down 11% from a year earlier. The Bank of Canada expects housing to remain relatively weak, as affordability constraints, slow population growth and rising borrowing costs weigh on demand. CREA releases its October figures on November 17.

CPI Inflation Update

Inflation rose to 3.1% year-over-year in September from 3% in August. Gasoline prices were 27.8% higher than a year earlier, up from 22.8% in August, even with the switch to cheaper winter-blend fuel. Excluding gasoline, inflation eased to 2.2% from 2.4%, and the Bank’s core measures eased too, with the trimmed-mean rate at 1.8%, the median rate at 1.9% and the common rate at 2.4%. Smaller annual gains in travel tours and groceries held back the all-items rate: grocery prices rose 1.7%, the smallest annual gain since May 2024 and the second straight month below the all-items rate. Rent growth held at 2.8%, and the mortgage interest cost (MIC) index fell 0.2%. Heating oil and other fuels rose 57.8%, and the Atlantic provinces, where heating oil is more common, felt it most. In its October Monetary Policy Report, the Bank of Canada put September energy inflation at 19% and expects CPI inflation to rise to about 3.5% by the end of the year. October figures are released on November 16.

Mortgage Statistics for Toronto

Home prices in Toronto have more than doubled in the last 10 years. Though inventory levels are high, prices have not dropped in any meaningful way. Here are some mortgage statistics for the housing market in the city:

• Average home value (as of $651,400 $651,400): $940,800 (CREA)
• Canadian homeownership rate (as of 2021): 66.5% (StatsCan)
• Number of home sales (as of $651,400 $651,400): 5,995 (CREA)
• Number of new listings (as of $651,400 $651,400): 14,484 (CREA)

Mortgage Options in Toronto

Toronto conventional mortgage: Conventional or uninsured mortgages require a downpayment of 20% or more. The equity from your downpayment is enough to protect the lender, and you will not require mortgage default insurance. With uninsured mortgages, there is no limit on the home’s purchase price. 

Toronto high-ratio mortgage: High-ratio or insured mortgages allow you to purchase a home with a downpayment of less than 20%. You must purchase mortgage default insurance to reduce the risk to the lender. With high-ratio mortgages, you will be limited to a purchase price of less than $1 million.

Toronto fixed-rate mortgage: Fixed-rate mortgages lock in your interest rate for the term. The principal and interest amounts are fixed, providing stable mortgage payments throughout the term. If you need to break the mortgage before the end of the term, penalties will be calculated based on the higher of the interest rate differential (IRD) or 3 months’ interest.

Toronto variable-rate mortgage: Variable-rate mortgages have interest rates that change based on the Bank of Canada policy rate and your lenders’ prime rate. Adjustable-rate mortgages (ARM) are variable mortgages that immediately adjust your mortgage payment to reflect changes to your lenders’ prime rate. The principal portion remains fixed, while the interest can increase or decrease when the prime rate increases or decreases. Variable-rate mortgages (VRM) are variable mortgages that have fixed mortgage payments despite changes to your lenders’ prime rate. The principal and interest on your fixed payment will adjust with more going to interest and less to principal if the prime rate increases or more going to principal and less to interest if the prime rate decreases. 

What Affects My Mortgage Rate in Toronto

The mortgage rate you are offered is influenced by your credit score, income, capital, downpayment, and loan-to-value (LTV) ratio. Mortgage rates are also priced based on the risks associated with the mortgage, the purpose of the loan, the property used as collateral, and the borrower.  Some of the most important determining factors affecting your mortgage rate include:

• Downpayment –  The amount of your downpayment will determine your LTV ratio and whether you will be required to purchase mortgage default insurance. Insured and insurable mortgages have better rates as there is a lower risk of loss to the lender. Insured and insurable rates apply to properties valued at less than $1 million with amortizations up to 25 years. 
• Amortization – With prime lending, the amortization period on uninsured mortgages (downpayments of 20% or more) cannot exceed 30 years. Uninsured mortgages typically have higher interest rates than insured and insurable mortgages to account for the added risk to the lender. The amortization on insured and insurable mortgages cannot exceed 25 years. 
• Property Usage – Your primary residence, known as owner-occupied, will generally have lower interest rates. Investment properties you intend to rent out will typically have higher interest rates. A primary residence with a second separate legally registered suite is considered an owner-occupied rental and will have access to the same rates as a primary residence. 
• Mortgage Type – Open mortgages have higher rates than closed rates due to the added flexibility. Refinances have higher rates than renewals and new mortgages. 
• Credit Score – Your credit score will impact the type of lender that approves you for a mortgage. If you have good to excellent credit, you can typically use prime lending and benefit from the best rates. If you have poor credit, you may need to consider alternative lending solutions with higher rates to offset the lender’s risks. 

First-Time Home Buyer Programs in Toronto

Toronto has several first-time homebuyer (FTHB) incentives available through the municipality, province, and federal government. These programs are designed to help provide financial relief for first-time buyers, offsetting some of the costs of purchasing a home. 

• Affordable Home Ownership Program (AHOP) – This program is designed for Aboriginal Canadians intending to purchase a home in the GTA as their principal residence. To qualify, you must be currently renting, intend to live in the home as a principal residence and have an income that doesn’t exceed the maximum household income (changes yearly). 
• Toronto Municipal Land Transfer Tax Rebate – This rebate provides up to $4,475 to cover all or part of the Toronto portion of land transfer tax.
• Ontario Land Transfer Tax Rebate – This rebate provides up to $4,000 to cover all or part of the Ontario portion of land transfer tax.
• First-Time Homebuyers Tax Credit (HBTC) – This federal government program allows first-time buyers to claim up to $10,000 for a maximum $1,500 tax credit to help offset closing costs. 

Land Transfer Tax in Toronto

Ontario’s Land Transfer Tax (LTT) rates are calculated based on the property’s purchase price and location. An additional Municipal Land Transfer Tax (MLTT) applies to properties located in Toronto. 

Ontario Land Transfer Tax

Home Value or Purchase Price	Marginal LTT Rate
Up to $55,000	0.5%
$55,001 – $250,000	1.0%
$250,001 – $400,000	1.5%
$400,001 – $2,000,000	2.0%
$2,000,000+	2.5%

Toronto Land Transfer Tax

Home Value or Purchase Price	Marginal MLTT Rate
Up to and including $55,000.00	0.5%
$55,000.01 to $250,000.00	1.0%
$250,000.01 to $400,000.00	1.5%
$400,000.01 to $2,000,000.00	2.0%
$2,000,000.01 to $3,000,000.00	2.5%
$3,000,000.01 to $4,000,000.00	3.5%
$4,000,000.01 to $5,000,000.00	4.5%
$5,000,000.01 to $10,000,000.00	5.5%
$10,000,000.01 to $20,000,000.00	6.5%
Over $20,000,000.00	7.5%

How to Find the Best Mortgage Rate in Toronto

• Step 1: Understand your credit score:  Before looking for a mortgage lender or applying for a mortgage, check your credit score regularly. This will help you immediately report and remedy errors that could negatively affect your score. If necessary, improve your credit score to help with your mortgage approval.
• Step 2: Determine your borrowing capacity: To find the right mortgage solution, you’ll need to know how much house you can afford based on your income and downpayment. 
• Step 3: Know your mortgage needs: Analyze different mortgage solutions’ features, risks, and costs. Careful research and comparisons of the available options can help you choose a mortgage that best meets your immediate and long-term financial needs.
• Step 4: Find a suitable mortgage strategy: Your mortgage strategy shouldn’t be based solely on the lowest rate. Get expert guidance to choose the best strategy for your homeownership goals. 
• Step 5: Compare rates and terms: Not all mortgages are equal. Choosing a lender like nesto for your mortgage can help you compare rates and terms for multiple lending solutions, ensuring you find the best fit. 
• Step 6: Get prequalified for a mortgage: Begin your journey towards homeownership by taking advantage of nesto’s prequalification process for a mortgage. By analyzing your downpayment and financial stability, nesto will provide you with a comprehensive prequalification outlining the maximum mortgage amount you can qualify for. This information is crucial as it helps you set realistic expectations and narrow your search for a suitable home within your budget.