What Are the Current Mortgage Rates in Ontario?

By Jessica van Rooyen

Homeowners in Ontario are looking around to see what the best rates are on mortgages, especially for more expensive homes in the GTA. The markets have changed so much in the last few years, as well, that the best rates you can get on a mortgage can change frequently.

What are the current mortgage rates in the province? If you're looking to purchase a new property, then you want to know the best mortgage rates in Ontario. What is the best option for you? Is it to get a home equity loan, or do you want to get a mortgage?

Ontario Mortgage Rate Market Trends

As the most populated province in the country, Ontario’s real estate market is highly competitive. This means there is also a competitive mortgage market. The average mortgage rate in Ontario is more often than not lower than in every other province. 

All of Canada’s top five banks are headquartered in the country’s biggest city, Toronto. Many credit unions, including Meridian Credit Union, Alterna Savings and Credit Union, and DUCA Financial Services Credit Union are also all headquartered in the city. Additionally, the province hosts the most bank branches, mortgage brokers, and credit unions in Canada. And they are all competing for your business. 

The lowest rates are typically found in the GTA due to the higher property values and concentration of lenders. However, this is changing as more people are turning online to shop around.

In terms of mortgage rate trends, the best 5-year fixed mortgage rate in 2015 was at 2.4%, reached 3% in 2017, and decreased to 2.29% in 2020. For 5-year variable mortgages, the average rate was at 2.05% in 2015, up to 2.79% in 2019, and back down to 2.10% in 2020.

What Are the Types of Mortgages in Ontario?

The types of mortgages found in Ontario are the same available throughout the country, with a concentration of larger mortgages compared to the other provinces. Ontario residents are also more likely to have 30-year amortizations due to the high property values, which cause borrowers to try and minimize their monthly payments. Residents also have more private mortgages, likely because there are more private mortgage lenders in the province than the rest of the country. 

Similar to the rest of Canada, the mortgage market is at its prime in the spring. The busiest months for mortgages are March, April, and May. This is the time that mortgage rates are often at their lowest as lenders try to compete for business. 

The Future of the Ontario Housing Market

The Ontario Ministry of Finance estimates that the population of the province will increase around 30.2% over the next two decades, to bring the population to 18.5 million by 2041.

The province boasts booming real estate markets with a lot to offer and nearby growing cities. Due to the expected population growth, the home prices in the southern part of the province are expected to rise. Properties in the “Golden Horseshoe” area are prone to inflation as this area is where immigration is high. In the “Green Belt”, land is limited and homes remain in short supply. These reasons explain why we can expect the Ontario mortgage amounts and payments to grow quicker than the national average.

Average Mortgage Amounts Per City

The size of the average mortgage largely depends on where one lives. As mentioned, real estate is more expensive on average in the GTA region, which explains the larger mortgages. The standard amount for a down payment on a house in Ontario is 20%, based on a 30-year amortization period. According to the Canadian Real Estate Association (CREA), these are the average mortgage amounts as of 2021:

• Oakville-Milton: $1,068,720

• Greater Toronto: $806, 080

• Durham Region: $715,858
• Hamilton-Burlington: $692,240
• Guelph: $616,400
• Kitchener-Waterloo: $590,560
• Cambridge: $589,920
• Barrie and District: $570,800
• Niagara Region: $496,560
• Ottawa: $489,520
• Brantford: $475,920
• Kingston: $462,379
• Windsor-Essex: $416, 494
• Sudbury: $308,027

Outside of these cities, there are residential areas that are perfectly habitable. The mortgage prices are higher the closer to the city’s core. A half-hour commute can save hundreds of thousands in the purchase price, and as a result, lower your mortgage payment.

Finding a Property in Ontario

There are a lot of factors that go into the decision of where to purchase a home. You need to consider things like the city you want to be in, the school system, the average cost of living, the crime rate, and the weather. One of the most important factors that go into the process of choosing a home is the location. 

Many factors come into play when people decide where they want to buy a home, but let’s focus on a few key considerations:

Cost of property: It’s no secret that cheap property usually means a less expensive price tag, but what does that really mean? A property that is priced below market value usually has some type of issue, whether it be structural, legal, or environmental. If you’re thinking about purchasing a foreclosure rate property, make sure to ask an expert about the hidden costs associated with such a purchase.

Overlooked factors: Ontario’s real estate market is a highly competitive one, with some cities holding allure over others. If you’re ready to make your move, you may want to consider factors other than cost, such as convenience and the potential for good schools.

House prices: The most important factor when it comes to the cost of a home is the land value of the property, which simply varies depending on the property’s location. For example, a condo downtown Toronto costs over $1,000 per square foot, compared to $800 per square foot in Scarborough. 

Finding a City in Ontario

Have you ever wondered where the most affordable large cities in Ontario are? If you're looking for a low-cost place to move, you can find it in the five most affordable large cities in Ontario: Windsor, London, Barrie, Kanata, and Guelph. For medium-sized cities, the most affordable are Sarnia, Thunder Bay, Sudbury, Stoney Creek, and Sault Ste. Marie.

One of the biggest decisions you’re going to make is where you’re going to live. Choosing where to live is more than just a practical choice. It’s about your career, your family, and your health. Choosing the right location can improve your quality of life, increase your opportunities, and even make you a little happier. Ultimately, the decision will depend on what you are looking for.