Best Mortgage Rates In Ontario For February 2025

We reviewed 100 mortgage lenders that do business both online and in-person throughout Canada. The lenders we reviewed represent some of the largest mortgage lenders by volume in Canada, which includes banks, credit unions and online lenders. Lenders that didn’t provide their mortgage rates or don’t operate in Ontario were not eligible for review.

Our conventional rates (rates that are uninsured) were generated through publicly available posted rates on the lender’s website, but also through the following borrower profiles that we presented to the lender anonymously by phone or online:

Profile 1

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $790,000
• Down Payment: 20% ($158,000)
• Credit Score: 700-719
• Postal Code: N2L 1V6 (Waterloo, Ontario)

Profile 2

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $1,300,000
• Down Payment: 20% ($260,000)
• Credit Score: 700-719
• Postal Code: V6A 2W5 (Vancouver, British Columbia)

Profile 3

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $300,000 ($60,000)
• Down Payment: 20%
• Credit Score: 700-719
• Postal Code: S4P 3C8 (Regina, Saskatchewan)

Profile 4

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $440,000 ($88,000)
• Down Payment: 20%
• Credit Score: 700-719
• Postal Code: B3S 0J1 (Halifax, Nova Scotia)

Our scores out of five are scored based on the following factors:

• Rate – 75%
• Timeliness – 5%
• Prepayment privileges – 5%
• Penalty calculation type – 10%
• Availability of discounted rates – 5%

Though these rates are accurate at the time of publication, they are intended only to provide a ballpark figure and sample of the rates a lender may offer in that province for that particular mortgage term. That does not mean that you will qualify for the above rates or that the lender in question hasn’t changed those rates since publication. Please consult a mortgage lender or broker to get the best rate possible for your particular property-buying circumstance and financial situation.

Fixed-rate mortgage rates are priced off of Government of Canada 5-year bond yields that fluctuate daily. Five-year fixed mortgage rates are typically 1.5% above the 5-year yield, though this spread can vary between 1% and 2%. This means if bond yields go up, fixed-rate mortgage rates also go up. Periods of high inflation (which occur when the CPI is above the Bank of Canada’s 2% target) cause bond yields to rise; conversely, when inflationary pressures cool, bond yields also come down. For example, in 1981 when the CPI averaged 12.5%, Canada experienced the highest inflation in 33 years. In September 1981, bond yields hit 18.78% and the 5-year fixed mortgage rate hit 21.75%.

As of February 10, 2025, the 5-year benchmark bond yield is 2.705%, down 100.39 basis points (or 1.0039%) from one year ago and down 25.95 basis points this year.

Variable-rate mortgages are affected by the Bank of Canada’s (BoC) monetary policy, namely interest rate hikes and cuts that occur eight times a year. The prime rate, or the rate the banks use to set the interest rates on their variable-rate products, is currently 5.20%, though some banks may post a different rate. For example, TD Bank’s prime mortgage rate is currently 5.35%. Variable rates will be quoted as plus or minus compared to the prime rate.

On June 5, 2024, the Bank of Canada cut its key interest rate by 25 basis points to 4.75%, its first rate cut in over four years. Then on July 24, the central bank cut rates by another 25 basis points to 4.5%, again on September 4 to 4.25%, and then by 50 basis points on October 23 to 3.75%. On December 11, 2024, the Bank cut rates by another 50 basis points to 3.25% and most recently on January 29, 2025, the bank cut rates to 3%. The BoC is widely expected to implement more rate cuts in 2025.

Related: How Mortgage Rates And Interest Rates Work

The Ontario housing market continues to rebound, according to December figures from the Ontario Real Estate Association (OREA), with home sales up 8.1% year-over-year. However, over the longer term, sales are still down: 18.8% below the five-year average and 17.88%% below the 10-year average for the month of December.

The year-to-date average price was $865,287, while the average price of resale homes sold in December 2024 was $834,123, down 1.7% from a year ago. By comparison, the national average price was $676,640 in December 2024, up only 2.5% on a year-over-year basis.

There was a significant increase of new listings, up 18.8% since December 2023, while active residential listings numbered 43,779 by the end of December units, up 24.7% year-over-year–the highest number of active listings in December in a decade.

At its most recent rate announcement on January 29, 2025, the Bank of Canada (BoC) cut its key interest rate by 25 basis points to 3%, its sixth consecutive rate cut, marking the end of quantitative tightening. While smaller than the last two “supersized” 50 basis point cuts, the BoC was widely expected to continue rate cuts with this announcement.

“Inflation has been close to the 2% target since last summer. Monetary policy has worked to restore price stability…Lower interest rates are boosting household spending and economic activity is picking up,”  said BoC Governor Tiff Macklem in his press conference opening statement. However, he added that the threat of U.S. tariffs created uncertainty with the central bank’s projections, which were not incorporated into their outlook or most recent Monetary Policy Report: “The potential for a trade conflict triggered by new U.S. tariffs on Canadian exports is a major uncertainty. This could be very disruptive to the Canadian economy and is clouding the economic outlook.”

Headline inflation has eased from 8.1% in June 2022 to 1.8% in December 2024 and now firmly sits within the central bank’s 1% to 3% target. In recent months, business and consumer expectations have normalized and there is no longer evidence of broad-based inflationary pressures, noted Macklem; even shelter price inflation, which has been historically elevated, is slowly coming down.

However, at the time of its announcement, Macklem said that U.S. President Trump’s threat to impose 25% tariffs on Canadian imports and a long-lasting and broad-based trade conflict would “badly hurt economic activity in Canada.”  

“Unfortunately, tariffs mean economies simply work less efficiently—we produce and earn less than without tariffs,” said Macklem. “Monetary policy cannot offset this. What we can do is help the economy adjust.”

He added, ”As we consider our monetary policy response, we will need to carefully assess the downward pressure on inflation from weakness in the economy, and weigh that against the upward pressure on inflation from higher input prices and supply chain disruptions.”

Since the central bank’s announcement, President Trump announced that he is moving ahead with a 25% tariff on Canada and Mexico as of Tuesday, February 4, 2025. In response, Canada announced retaliatory tariffs of 25% on $155 billion of U.S. goods. Economists responded that Trump’s move could throw Canada into recession and cause unemployment to surge. 

BMO chief economist Douglas Porter wrote in a research note that while the bank previously forecast two more cuts in April and July, bringing the benchmark rate to 2.5%, “We now look for the quarter-point pace to continue each meeting until October, thus ending at 1.5%.” National Bank chief economist and strategist Stéfane Marion wrote that there is a “strong argument for an emergency or inter-meeting interest rate cut by the BoC” of at least 50 basis points, followed by two additional 25 basis point cuts in March and April, bringing the policy target rate to 2% by spring.

However, after some last-hour negotiations with Prime Minister Trudeau, Trump has announced a 30-day pause on imposing tariffs on Canada and Mexico.

The next scheduled rate announcement is on March 12, 2025.

Related: The Bank of Canada Cuts Key Interest Rate to 3%

Canada’s inflation rate came in line with the Bank of Canada’s expectations though slightly lower than analysts’ forecasts, slowing to 1.8% in December. The deceleration was driven mainly by the fed’s GST/HST holiday that brought down prices for restaurant food and alcohol. Excluding food, December’s inflation rate rose 2.1%.

On a monthly basis, the CPI declined 0.4% in December. The bank’s preferred measures of core inflation also edged down slightly month-over-month, with CPI-median at 2.4% (versus 2.6% in November) and CPI-trim at 2.5% (versus 2.6% in November).

Canadians paid less when dining out in December, with prices down 1.6% year-over-year (marking the index’s first annual decline) and 4.5% compared to November 2024. Prices for alcohol purchased from stores also declined in December, down 1.3% compared with a 1.9% increase in November. Prices fell 4.1% month-over-month.

Prices for toys, games (excluding video games) and hobby supplies decreased 7.2% year-over-year, while the children’s clothing index fell 10.6% in December compared to the same month in 2023.

A note about the GST/HST holiday: Prices in the CPI are final prices, including taxes paid by consumers, meaning that CPI changes due to changes to any taxes. The federal government announced a temporary GST/HST break on certain goods from December 14, 2024 to February 15, 2025; affected goods include food, alcoholic beverages and tobacco/cannabis products, children’s clothing and footwear, diapers, car seats and toys, games, books, newspapers and Christmas trees. Approximately 10% of the all-items CPI is affected by the tax exemption. The impact of the tax break will continue into January 2025 as the full month is impacted, compared to only 18 days in December.

Statistics Canada will release the January CPI figures on February 18, 2025. 

Related: Inflation Rate Slows To 1.8% In December

Current average mortgage rates in Ontario are approximately:

• 3-year variable: 4.89%
• 3-year fixed: 5.14%
• 5-year variable: 5.14%
• 5-year fixed: 4.64%
• 10-year fixed: 6.38%

Rates as of February 10, 2025.

According to Forbes Advisor Canada, the best mortgage rates in Ontario are:

• 3-year variable: 4.55% (Dominion Lending Centres, The Mortgage Centre)
• 3-year fixed: 4.24% (nesto Inc.)
• 5-year variable: 4.15% (nesto Inc.)
• 5-year fixed: 3.94% (nesto Inc.)
• 10-year fixed: 5.75% (Dominion Lending Centres, The Mortgage Centre)

Rates as of February 10, 2025

Open vs. Closed Mortgage

An open mortgage offers flexibility to prepay your mortgage without penalties. In exchange, open mortgage rates tend to be higher than closed mortgage rates. Meanwhile, closed mortgages have penalties for exceeding an annual prepayment threshold.

Fixed-Rate Mortgages

A fixed-rate mortgage allows you to lock in a stable rate throughout your term. Fixed-rate mortgages are popular when borrowers expect interest rates to increase during their term. However, you’ll end up paying more interest if rates drop during your term.

Variable-Rate Mortgages

Variable mortgage rates are tied to your lender’s prime rate. In Canada, three-quarters of variable mortgages have fixed payments, according to the Bank of Canada. Unlike the adjustable-rate mortgages, or ARMs where the amount you pay each month fluctuates with prime, with an variable-rate mortgage (VRM), an increasing rate won’t adjust your payment amount, but rather decrease the portion of each payment applied towards the loan principal. While variable-rate mortgages are less popular than fixed-rate mortgages due to their potential volatility, borrowers opt for variable-rate mortgages when they expect rates to drop throughout their term.

Your Down Payment

Your mortgage rate adjusts with your down payment amount. Interestingly, you’ll receive the lowest mortgage rates when your down payment is below 20%. This protects lenders because you’ll need separate mortgage default insurance from the Canada Mortgage and Housing Corporation (CMHC). Although your mortgage rate decreases, the additional insurance costs will affect your cost of borrowing. Conversely, larger down payments mitigate lender risk, leading to a reduction in your interest rate. Interestingly, lenders face the highest risk when the down payment is exactly 20%.

Your Amortization Period

Longer amortization periods typically have higher interest rates, compared to shorter ones. In addition, extended amortization periods increase your lifetime interest paid. Conversely, shorter amortization periods decrease the amount of interest paid throughout your loan, but increase your monthly mortgage payment.

Your Mortgage Term

While your amortization period is the length of time it takes to repay your loan, say 25 years, your mortgage term is the amount of time before your mortgage renews, typically one, three, five or 10 years, with the most popular term typically being five years. Historically, the longer your term, the higher the interest rate.

Property Usage

Investment properties and secondary vacation homes represent increased risks versus primary residences. Lenders offset these risks by charging you higher interest rates.

Mortgage Type

Refinancing your mortgage generally increases your interest rate compared to purchasing a new home. This is because lenders perceive new home purchases as less risky than significant alterations to an existing mortgage. The interest rate you receive upon mortgage renewal is contingent on both your creditworthiness and the prevailing market conditions at the time of renewal.

Your Employment Status

Lenders favour a stable employment history, especially permanent positions, indicating financial stability and a reliable income. Self-employed and contract workers need extra documentation to secure a good interest rate.

Your Credit Score

A higher credit score can result in lower mortgage rates. In Canada, most mortgage lenders want to see a score exceeding 680. Anyone with a score below that number will likely need to work with private lenders, who have much higher interest rates.

Your Debts

Lenders assess your ability to make mortgage payments using two key ratios: Gross Debt Service Ratio (GDS) and Total Debt Service Ratio (TDS). Lower ratios signify that your income can sufficiently cover payments, enhancing your eligibility for a mortgage. In Canada, the typical maximum GDS and TDS ratios are 39% and 44%, respectively.

At a minimum, potential homeowners need to put down 5% of the first $500,000 and 10% of the remaining amount up to $1.5 million. (Purchases over $1.5 million require a 20% down payment.)

Keep in mind that down payments below 20% require additional mortgage default insurance. To decrease your mortgage size, you’ll need to increase your down payment.

When you purchase a property in Ontario, you must pay a land transfer tax on the fiar market value of the property. Similar to income tax, the land transfer tax rates are graduated, so you pay different rates on different value brackets.

For example, assuming a property purchased for $400,000, the land transfer tax is calculated as follows:

The first $55,000 x 0.5% = $275
The amount between $55,000 and $250,000 (or $195,000) x 1% = $1,950
The amount exceeding $250,000 (or $150,000) x 1.5% = $2,250

The total land transfer tax payable is $4,475.

Boosting your creditworthiness is crucial for securing the best mortgage rate in Ontario. You can achieve this through timely payments and responsible credit management. Once you’ve improved your credit profile, be sure to compare various lenders to identify competitive rates. One appealing option that many borrowers consider is the 3-year fixed mortgage due to its favourable terms.

Ontario borrowers and brokers operate within a regulated lending framework overseen by the Financial Services Regulatory Authority (FSRA). The FSRA’s goal is to ensure accountable and transparent mortgage transactions. They act as a centralized authority, providing comprehensive licensing and compliance requirements, regulatory updates and educational resources for mortgage brokers, agents, brokerages and administrators.

Ontario Mortgage Lender Regulations

The Mortgage Brokerages, Lenders, and Administrators Act is an Ontario law that oversees the mortgage industry. It requires companies and individuals who deal with mortgages to have a licence.

Another key element is that mortgage brokers must clearly show borrowers how much it will cost to get a mortgage from them. The FSRA can investigate and penalize licensed mortgage lenders if they break the law. There are fines and jail penalties for serious offences.

Ontario Mortgage Broker Regulations

A mortgage broker connects you with a lender. As of April 1, 2023, the FSRA has streamlined the process for criminal record checks, designed to promote a secure and transparent environment for borrowers.

There are three key ways to save on your mortgage in Ontario:

Take advantage of prepayment privileges: Most closed mortgages allow you to make a lump sum payment, between 10% and 20% on the original principal, once per year without penalty.

Accelerate your payments: Opting for bi-weekly payments, for example, adds an extra month’s payment each year.

Take advantage of falling interest rates: If you have a convertible mortgage, switch to a new lower rate at the end of your initial term. Or, if your mortgage is coming to maturity, talk to your broker about whether a variable or fixed-rate mortgage at a lower rate makes sense.

Ontario offers various first-time home buyer programs. Notably, this includes the Ontario Land Transfer Tax Refund that can refund you up to $4,000. Toronto residents can further reduce closing costs through the First-Time Purchaser Rebate, potentially saving a total of $8,475.

Several Ontario municipalities, including Niagara, Kingston, Simcoe, Region of Waterloo, Chatham-Kent,District of Muskoka, Brantford, and Dufferin County have homeownership incentive programs. They can provide down payment assistance and forgivable loans based on income and property value.

On a Federal level, Canada offers various programs such as the First-Time Home Buyer Incentive, the Home Buyers’ Plan and the new First Home Savings Account (FHSA).

However, as of March 31, 2024, the First-Time Home Buyer Incentive will be discontinued. The deadline for new or updated submissions was March 21, 2024 at midnight eastern time. Read our Feds Scrap First-Time Home Buyer Incentive Program news article to learn more.

Mortgage rates have already started to fall in sync with cuts to the Bank of Canada’s overnight lending rate, which currently sits at 3%. As headline inflation continues to cool, most recently reported at 1.8% as of December 2024, the central bank is widely expected to make further cuts to Canada’s benchmark rate. As it drops due to easing inflation, declines in Ontario’s mortgage rates will follow.