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Today’s Best Ontario Mortgage Rates

Your Guide to Getting the Best Mortgage Rates in Ontario

When you’re looking to find the very best mortgage rates in Ontario, nesto is your one-stop shop. You can always rely on us to help you better understand how to navigate mortgages in any kind of market and provide the very best interest rate upfront.

About Ontario

Ontario is Canada’s second-largest province, bordered by Quebec to the east, Manitoba to the west, Hudson Bay and James Bay to the north, and the St Lawrence River and the Great Lakes to the south. Ontario’s varied landscape includes the vast, rocky and mineral-rich Canadian Shield, which separates the fertile farmland in the south and the grassy lowlands of the north.

Key facts about Ontario:

  • More than 250,000 lakes, which contain about one-fifth of the world’s fresh water
  • Temperature ranges are quite drastic – from highs well above 30°C (sometimes 40°C with humidity) in summer to lows below minus 40°C (especially with windchill factored in)
  • Industries range from cultivating crops and mining minerals to manufacturing automobiles and designing software and leading-edge technology
  • Cultures from around the world thrive and are celebrated with festivals such as Caribbean Carnival, Oktoberfest and the Canadian Aboriginal Festival
  • Travellers can enjoy diverse experiences – from a wilderness expedition in the north to a shopping and theatre city excursion

Learn About Rates & Mortgages in Ontario

Welcome to our Frequently-Asked Questions (FAQ) section, where we answer the most popular questions our nesto advisors receive on a daily basis across Ontario, designed to help you make informed mortgage decisions every time you need a new mortgage or to renew/refinance an existing one.

What are today’s mortgage rates in Ontario?

nesto’s advanced technology empowers us to ensure you always have the latest rate information at your fingertips to help you make the most informed decisions about whether to stay the course or lock in your rate (see chart).

Why get Ontario mortgage rates on nesto?

By consulting Ontario mortgage rates on nesto, you’re always getting the most up-to-date information, which helps you save money throughout your time as a homeowner.

When comparing rates, be sure to look at similar terms (such as three or five years) and mortgage types (fixed rate vs variable rate) so you’re measuring similar products and not looking solely at rates. Mortgage rates and features vary by lender so, in order to gain an accurate comparison, you have to look at similar offerings.

Should I get an open or closed mortgage in Ontario?

Whether you should select an open or closed mortgage in Ontario depends on your specific life and financial circumstances.

When looking at open vs closed mortgages, it’s important to note that open mortgages are priced higher because of the flexibility they offer to pay the mortgage off at any time without facing a penalty. If you have no need to pay the mortgage off quickly, it makes sense to select a closed mortgage and benefit from lower rates.

Should I use a mortgage broker or lender in Ontario?

In Ontario, a mortgage broker – or mortgage agent, depending on specific licensing – is a professional who can negotiate the best mortgage by comparing all the offerings from multiple lenders, including banks, credit unions and trust companies, as well as alternative and private funding specialists. In other words, the mortgage broker acts as an intermediary between the borrower and the lender.

A mortgage lender is one financial institution or bank that offers a single line of mortgage products direct to borrowers. The lender’s mortgage specialists only have access to their own mortgage products.

nesto advisors offer the lowest rate upfront every time. Yes, we make less than the average broker or mortgage specialist, but we get the peace of mind knowing that we helped you save thousands of dollars on your mortgage.

Should I try to find a mortgage with a rate hold in Ontario?

If you’re planning to buy Ontario property in the future, it’s a wise choice to request that nesto secure a rate hold on your behalf so you don’t have to worry about interest rates rising while you’re home shopping.

Ensuring you have a rate hold in place is like having insurance on your mortgage rate – you no longer have to worry about mortgage rate increasing while you find your new home over the next 90-120 days.

About the Ontario Housing Market

Throughout 2021 and into 2022, Ontario has experienced some of the highest average residential price increases for single-detached homes in the country. The majority of regions in the province experienced increases between 20% and 35.5% year over year (2021 vs 2020) while two of the most populated cities, Toronto and Mississauga, along with the smaller Thunder Bay, experienced price increases below 20%.

In terms of condominiums and townhomes, smaller suburban markets such as Kitchener, North Bay, London, Peterborough and Southern Georgian Bay saw higher gains year over year.

High demand coupled with low supply is expected to keep most of Ontario in sellers’ market territory with multiple offers continuing to drive up sale prices.

First-Time Home Buyer Programs in Ontario

There are several first-time home buyer incentives and programs available in Ontario that were designed specifically to help lighten the financial burden for first-time home buyers. These programs will offset some home buying costs as well as help fund your down payment, which is often one of the biggest hurdles involved in buying your first home. See: First-Time Home Buyer Programs in Canada

What are the Different Types of Mortgages?

Open vs Closed Mortgage

With an open mortgage, you’re able to prepay any amount of your mortgage at any time without facing a prepayment penalty. The compromise for having an open mortgage is that interest rates are higher to make up for the flexibility of being able to pay it off at any time.

With a closed mortgage, on the other hand, the interest rate is more attractive than a closed mortgage because you’re limited by how much extra you can pay towards your mortgage each year. So, the compromise here is that you’ll face a prepayment limit. This means that you’re only permitted to pay a certain percentage of your original or current balance per year – often 15%, on average, but this varies between lenders. If you have the choice, be sure to always opt for the original balance prepayment option as it will enable you to pay off more in a year. And if you choose to pay more than your annual limit, you’ll receive a prepayment penalty. It’s important, therefore, to be aware of your limits and stay within them.

Fixed Mortgages

Fixed-rate mortgages make up 70% of all mortgages in Canada. A fixed-rate mortgage keeps your interest rate steady over the term of your mortgage (1-10 years). There’s no doubt that the five-year fixed-rate mortgage is the most common choice selected by Canadian homeowners. But, this isn’t the best option for everyone, regardless of its popularity. Fixed-rate mortgages appeal to homebuyers who are looking for a dependable payment schedule, manage a tight monthly budget or are generally more conservative. For instance, Millennials with large mortgages relative to their income may be better off opting for the peace of mind provided by a fixed rate and payments. 

Variable Mortgages

A variable-rate mortgage fluctuates with the lender’s prime rate throughout your mortgage term. While your mortgage payment will remain the same over your term, your interest rate may change based on market conditions. So, if the prime rate rises or falls, this impacts the amount of principal you pay off each month. When rates on variable-rate mortgages drop, more of your payment is applied to your principal balance. And, conversely, if rates increase, more of your payment will go towards the interest portion of your mortgage. Historically, variable rates have paid off for Canadians over time.

Land transfer tax in Ontario

Land transfer tax rates in Ontario are calculated based on the purchase price of the property (see chart). In Toronto, municipal land transfer tax is also required (see chart) in addition to the Ontario land transfer tax amount due.

Ontario Land Transfer Tax

Home Purchase PriceMarginal Tax Rate
Up to $55,0000.5%
$55,001-$250,0001.0%
$250,001-400,0002.0%
$2,000,000+2.5%

Toronto Land Transfer Tax

Home Purchase PriceMarginal Tax Rate
Up to $55,0000.5%
$55,001-$250,0001.0%
$250,001-400,0002.0%
$2,000,000+2.5%

What Affects My Mortgage Rate in Ontario?

Factors such as credit score and income play a big part in qualifying for the lowest interest rate in Ontario. The riskier a borrower appears, the higher the interest rate can be. Rate is definitely not the most important aspect of a mortgage, however, as many rock-bottom rates often come from no-frills mortgage products. In other words, even if a borrower qualifies for the lowest rate, they must often give up other features such as prepayments and porting privileges when opting for the lowest-rate product.

There are many other ways to save money over the mortgage term instead of taking the lowest rate, including rounding up mortgage payments or making lumpsum payments when bonuses, etc are received throughout the year. It’s important, however, not to exceed the allowable limit on annual extra payments with your lender.

Down Payment

The size of your down payment will determine whether you must also pay mortgage default insurance in addition to your regular mortgage payments. Mortgage default insurance is required any time you make a down payment that’s less than 20% of the property’s value.

Amortization Period

If you select a longer amortization period (the maximum is 25 years on mortgages with less than a 20% down payment and 30 years on mortgages with down payments of 20% or higher), your individual mortgage payment will be lower because they’re spread out over a longer period of time. Longer amortizations can come equipped with higher interest rates. You’ll also pay more interest the longer you take to pay off your mortgage.

Property Usage
If you’re buying a home that you personally intend to live in, this is considered your primary residence and is known as owner occupied. If you’re buying an investment property that you intend to rent to others, you’ll pay higher interest rates than on your primary residence. The logic behind this is that people will pay the mortgage on their primary residence before any rental properties. As such, lenders build added risk into the rates for rental properties.

Mortgage Type

The type of mortgage you select – such as variable vs fixed and open vs closed – will play a role in your mortgage rate. Each selection is a personal choice based on a number of factors.

When looking at open vs closed mortgages, for instance, it’s important to note that open mortgages are priced higher because of the flexibility they offer to pay the mortgage off at any time without facing a penalty.

And while variable mortgages have proven to be more cost effective over time than fixed mortgages, some people prefer the certainty of having the same payment throughout the mortgage term as is the case with fixed mortgages.

Your Credit Score

The ideal candidate for a traditional mortgage lender has a credit score that’s 680 and above. The higher the score is above 700 the better – with a maximum score of 900 possible – as borrowers will qualify for the lowest rates. There are options available for people with lower scores as well, but you can expect rates to be higher and terms to be shorter in these circumstances. nesto has strict lending guidelines that require a minimum credit score and no recent missed payments.

How nesto works

Our salaried mortgage advisors are rewarded based on your satisfaction. We’re here to help you reach your goal and guide you through the complicated world of home financing. #yesyoucan #empowermentisthenewsexy

A mortgage professional knows the market’s best rates every time they check their email. Only a few of them will give you that rate without making you work for it. nesto’s here to change the industry for this very reason. You always get the best rate upfront with nesto.