Best Mortgage Rates in Ontario

Popular Mortgage Rates in Ontario: Navigating Rate Uncertainty

Borrower preferences for mortgage products in Ontario have shifted significantly in response to the volatile interest rate environment of recent years.

Historically, fixed-rate mortgages, particularly the five-year fixed term, have been popular choices for Ontario homebuyers seeking predictability and stability in their mortgage payments.

However, the period of extremely low interest rates from 2020 to early 2022 saw a dramatic surge in the popularity of variable-rate mortgages, as their rates were substantially lower than fixed options. This trend reversed sharply when the Bank of Canada began its aggressive rate-hiking cycle in March 2022. Faced with rapidly increasing payments or extended amortizations, borrower demand shifted decisively away from variable rates.

By March 2024, variable-rate mortgage quotes represented only 14% of consumer interest tracked by Ratehub, down from a peak of 59% in July 2022. While variable rates still account for roughly one-third of outstanding mortgage debt nationally (due to the large volume originated during the low-rate period), their share of new originations dropped significantly, representing only 10-15% of new loans recently.

Concurrently, there has been a notable trend towards shorter fixed-term mortgages. While the five-year fixed term remains a benchmark, many borrowers, anticipating future interest rate declines, opted for shorter terms like two or three years. This allows them to potentially renew into a lower rate environment sooner, albeit often at the cost of a slightly higher initial rate compared to a five-year term.

Ratehub data indicated that quotes for three-year fixed mortgages surged from 27% of total quotes in December 2023 to 46% by March 2024. Supporting this, CMHC reported that terms ranging from three years to less than five years were the most popular choice for newly extended mortgages by federally regulated lenders in February 2024, accounting for nearly 40% of lending.

Bank of Canada analysis revealed that 71% of all mortgages originated in 2024 had fixed terms of less than five years. This pronounced shift towards shorter fixed terms, despite potentially higher initial costs, underscores a strong collective expectation among borrowers that interest rates will fall in the medium term. Borrowers appear willing to forgo longer-term payment certainty in favour of positioning themselves to potentially benefit from lower rates upon earlier renewal.

Looking ahead into 2025, forecasts generally anticipate further decreases in variable mortgage rates as the Bank of Canada is expected to continue its easing cycle, potentially bringing its policy rate down into the 2.0% to 2.75% range by the end of the year. Fixed mortgage rates, however, may have less room to fall. Bond yields, which heavily influence fixed-rate pricing, appear to have already incorporated expectations of future Bank of Canada cuts. Added volatility from U.S. economic conditions and potential trade policy changes could also limit significant declines in fixed rates.

Understanding Mortgage Rates Ontario: Pricing Dynamics

Mortgage rates are influenced by different factors depending on whether they are fixed or variable. Five-year fixed mortgage rates, the most common benchmark, generally track the yield on Government of Canada bonds with a corresponding five-year maturity, plus a risk premium or spread determined by the lender. This spread can fluctuate based on market conditions, competition, and the lender's funding costs.

Variable mortgage rates, conversely, are tied to the lender's prime rate. The prime rate itself moves in lockstep with the Bank of Canada's target for the overnight rate, meaning changes in monetary policy directly impact variable-rate borrowers.

It is also common for mortgage rates offered for refinancing purposes to be higher than those available for new home purchases or mortgage switches (transferring a mortgage to a new lender at renewal). Several factors contribute to this difference. Cash-out refinances, where borrowers increase their mortgage balance to access equity, inherently increase the lender's risk due to a higher loan-to-value (LTV) ratio, justifying a higher rate.

Additionally, some lenders may prioritize attracting new customers with more competitive purchase rates, while others might focus their business strategy on refinancing. It's also possible that higher refinance rates serve to discourage existing customers from breaking their current mortgage term to secure a lower rate, or to partially offset the reduced interest income for the lender if a borrower does refinance.

Why Are Refinance Mortgage Rates Higher than New Purchase Mortgage Rates in Ontario?

Refinance mortgage rates are typically higher than rates for new home purchases in Ontario because lenders perceive refinancing as inherently riskier. When a homeowner refinances, they often tap into their home equity, potentially increasing their loan amount or altering the terms of their original mortgage. Lenders view this increased debt burden as carrying more risk, particularly if the borrower's financial situation has changed since the initial purchase.

Another factor influencing higher refinance rates is related to market competition and incentives. Purchase mortgages often benefit from promotional rates or discounts offered by banks and financial institutions aiming to attract new clients and gain market share. In contrast, refinancing typically involves existing clients who have less bargaining power because they are already locked into an existing arrangement. Consequently, financial institutions are less inclined to offer lower rates since there is reduced pressure from competitors.

Furthermore, administrative and regulatory costs associated with refinancing tend to be higher, which can also contribute to elevated rates. Processing a refinance often requires additional paperwork, property appraisals, and title searches, adding to the lender's operational costs. These costs are typically passed onto the borrower through slightly higher interest rates.

Lastly, economic factors can influence refinance rates, especially during periods of rising interest rates. When lenders anticipate economic uncertainty or rising rates, they often set refinance rates higher to mitigate potential future risks. In Ontario, where housing markets have seen significant fluctuations, lenders use higher rates on refinances to hedge against possible downturns, changes in home values, or increases in default risk.

How Much Mortgage Do You Need to Buy a Home in Ontario?

When determining how much mortgage you need to buy a home in Ontario, you'll first need to consider the price of the property you're interested in and the down payment you can afford. Typically, homes in Ontario vary widely in price depending on the region—properties in major cities like Toronto, Ottawa, or Hamilton can be significantly more expensive compared to smaller towns or rural areas. For instance, the average price of a detached home in the Greater Toronto Area is substantially higher than in smaller Ontario communities.

Your mortgage amount will essentially be the difference between your home's purchase price and your down payment. In Ontario, the minimum required down payment depends on the home's price: for homes priced up to $500,000, you'll generally need a minimum down payment of 5%; for homes between $500,000 and $1 million, you'll need 5% on the first $500,000 and 10% on the remainder. Homes priced above $1 million require at least 20% down. The more substantial your down payment, the lower your required mortgage will be, potentially saving thousands of dollars in interest payments over the life of your loan.

In addition, it's crucial to consider other financial factors like mortgage insurance, closing costs, legal fees, and land transfer taxes, all of which can significantly impact how much mortgage you'll ultimately need. Mortgage lenders in Ontario typically assess your financial situation by evaluating your income, credit history, debt levels, and employment stability to determine your borrowing capacity. Your mortgage lender will ensure your debt servicing ratios meet their criteria, meaning your housing expenses and overall debt repayments stay within acceptable limits relative to your income.

Finally, your required mortgage will also depend on current interest rates. Higher interest rates decrease the amount you can borrow, as monthly payments become more expensive, whereas lower interest rates increase affordability. Therefore, the mortgage amount you'll need to buy a home in Ontario will be unique to your financial situation, the property you choose, and prevailing market conditions.

Table 5: Average New Mortgage Amount by Major Ontario City (2023)

Why Is It Worth it to Compare Ontario Mortgage Rates?

Comparing mortgage rates in Ontario is one of the most effective ways to save thousands of dollars over the lifetime of your home loan. Even a slight difference in interest rates—just a fraction of a percentage point—can translate into substantial financial savings when spread out over decades. That's why using a mortgage comparison platform like Dollarwise is so valuable. We empower homebuyers and homeowners alike by providing instant access to up-to-date mortgage rates from multiple lenders across Ontario.

Choosing the first mortgage rate you're offered without comparison could mean missing out on significant savings. Dollarwise makes the comparison process simple, transparent, and efficient. By clearly showing you how different lenders stack up against each other, we ensure you're not paying more than you have to. Our platform also highlights special promotions and exclusive rates that banks and mortgage brokers might not proactively disclose, making sure you're always getting the best possible deal.

Moreover, comparing mortgage rates gives you leverage when negotiating with lenders. Armed with competitive options from Dollarwise, you're better positioned to secure favorable terms, whether you're buying your first home, renewing your existing mortgage, or refinancing for renovations or debt consolidation. Dollarwise not only saves you money, but also time, offering personalized insights quickly—without the hassle of visiting multiple lenders individually.

Ultimately, Dollarwise simplifies your search for the ideal mortgage rate in Ontario, making the entire mortgage experience less stressful and more rewarding.

Ontario Housing Market Pulse: Q2 2025 Update

The Ontario housing market experienced a significant cooling trend in the first quarter of 2025, marked by declining sales activity and moderating price growth amidst considerable economic uncertainty. Residential sales reported through Multiple Listing Service® (MLS®) Systems across Ontario numbered 11,978 units in March 2025, representing a substantial year-over-year decrease of 24.6% compared to March 2024.

This level of activity was far below historical norms, falling 42.5% below the five-year average and 41.4% below the 10-year average for the month of March. The slowdown was consistent throughout the first quarter, with year-to-date home sales totalling 31,062 units, a decline of 20.7% from the first three months of 2024. This provincial trend mirrored the national picture, where Canadian home sales also fell month-over-month in March 2025 and registered a 9.3% year-over-year decline, marking the lowest national sales volume for March since 2009. Market analysts attribute this pronounced slowdown primarily to heightened economic uncertainty and geopolitical tensions, particularly concerning potential U.S. trade tariffs. The Canadian Real Estate Association (CREA) noted that rising tariff turmoil kept many prospective homebuyers on the sidelines. This sentiment was echoed by industry economists who observed that declining home sales were largely driven by tariff uncertainty, shifting the market outlook from a potential \"slam dunk rebound year\" to \"treading water at best\".

Pricing trends across Ontario reflected this cautious environment. The average price for resale residential homes sold in Ontario during March 2025 was $860,545, representing a 3.8% decrease from March 2024. The year-to-date average price for the first quarter stood at $846,188, a more modest decline of 2.8% compared to the same period in 2024.

Provincially, the MLS® Home Price Index (HPI) composite benchmark price, which provides a more stable measure of typical home values, was $845,200 in March 2025. This figure was down 4.0% year-over-year and showed a 1.7% decline from the previous month. This price softening was particularly evident in Ontario's Greater Golden Horseshoe (GGH) region.

In contrast, other parts of Canada, notably the Prairies and Quebec, continued to experience price growth during this period. Compared nationally, Ontario's average price remained significantly higher than the Canadian average of $678,331 recorded in March 2025 (which was down 3.7% year-over-year).

While demand softened, housing supply saw a notable increase. The number of new residential listings on Ontario MLS® Systems rose by 12.3% in March 2025 compared to March 2024, reaching 35,843 units. This influx of new supply, combined with slower sales, led to a significant surge in overall active listings. At the end of March 2025, there were 58,939 active residential listings across the province, marking a substantial 45.9% jump from the previous year and representing the highest level for March in over a decade. This inventory level was considerably above historical averages, sitting 67.4% above the five-year average and 57.1% above the 10-year average for March.

Consequently, the market balance shifted considerably. Months of inventory (MoI) – the time it would take to sell current listings at the prevailing sales pace – reached 4.9 months at the end of March 2025. This was a sharp increase from the 2.5 months recorded in March 2024 and significantly higher than the long-run average of 2.1 months for this time of year. Furthermore, the provincial Sales-to-New-Listings Ratio (SNLR) stood at 33% in March 2025, firmly indicating buyer's market conditions (typically defined as below 40%). This contrasted with the national SNLR of 45.9%, which, while being the lowest since February 2009, still bordered on balanced market territory (generally considered between 45% and 65%). The sharp rise in inventory and MoI, coupled with the steep drop in sales, signals a decisive shift in market power towards buyers in Ontario during early 2025. This dynamic fundamentally alters the negotiation landscape, providing buyers with greater choice and leverage, and suggests that downward pressure on prices could persist if demand remains subdued.

Regional Deep Dive: Contrasting Fortunes

While the provincial trend indicated a cooling market favouring buyers, conditions varied significantly across Ontario's diverse regional markets in early 2025.

Greater Toronto Area (GTA): The GTA market mirrored the provincial slowdown in sales but exhibited slightly different price dynamics. The average selling price in the GTA for March 2025 was $1,093,254. This represented a 2.5% decrease compared to March 2024, although it showed a slight month-over-month increase of 0.8% from February 2025. Home sales in the region were down sharply by 23.1% year-over-year, consistent with the broader provincial trend. However, new listings surged by 28.6% compared to the previous year, contributing to a significant increase in overall inventory. The MLS® HPI Composite benchmark for the GTA was down 3.8% year-over-year. This increase in available properties provided buyers with greater choice and enhanced negotiating power compared to the tighter conditions of previous years.

City of Toronto (416 Area Code): Within the GTA, the City of Toronto (area code 416) displayed more price resilience than its surrounding regions. The average selling price for all property types in March 2025 reached $1,110,924. Notably, this was a 2.2% increase compared to March 2024, and also represented a 2.19% rise from February 2025. Price performance varied by property type: detached homes averaged $1,723,489 (+0.9% YoY), semi-detached homes averaged $1,337,498 (+3.0% YoY), and freehold townhouses averaged $1,297,377 (+1.9% YoY). However, the condominium apartment segment saw a slight decline, with an average price of $716,460 (-1.8% YoY).

Peel Region (Mississauga & Brampton): In contrast to the City of Toronto's modest price gains, key suburban markets in Peel Region experienced year-over-year price declines in March 2025. In Mississauga, the average home price was $1,046,145, down 3.9% from March 2024. Brampton saw an average price of $908,169, representing a 2.4% decrease year-over-year. The sharp divergence in price trends between Toronto's core and these large suburban municipalities suggests differing demand dynamics or supply levels within the broader region. The relative strength in the 416 area, particularly in detached and semi-detached segments, might indicate more resilient demand or tighter inventory compared to Mississauga and Brampton, potentially influenced by factors like migration patterns or varying supply levels across property types.

Ottawa: The Ottawa housing market demonstrated relative stability in March 2025. The average price of homes sold was $685,866, essentially unchanged from March 2024 but up 2.4% from February 2025. The overall MLS® HPI composite benchmark price stood at $626,200, reflecting a 2.2% increase compared to March 2024. Single-family homes led the benchmark gains at $698,700 (+2.7% YoY), followed by townhouses/row units at $431,200 (+3.0% YoY). Conversely, the benchmark apartment price declined to $400,900 (-4.3% YoY). While sales activity was down 6.2% year-over-year, the market saw a significant influx of inventory, with active listings surging by 60.3% compared to March 2024. This pushed the months of inventory up to 3.9 months from 2.3 months a year prior. Despite the increased supply, the SNLR was 50%, indicating balanced market conditions. OREB characterized the market as stable but gaining momentum heading into the spring season.

London-St. Thomas: This market experienced a more pronounced slowdown in March 2025. The average home price was $643,159, down 0.6% year-over-year and 0.7% month-over-month. The MLS® HPI benchmark price was $614,300, showing a modest 1.0% year-over-year gain but a 1.3% decrease from the previous month. Sales activity saw a sharp decline, with transactions dropping 33.5% compared to March 2024. Concurrently, active listings rose by 21.1% year-over-year, leading to 4.8 months of inventory. The SNLR stood at 41.5%, indicating a balanced market but leaning towards buyers. Local real estate board commentary attributed the sales drop partly to the impact of tariff and economic uncertainties on consumer confidence.

The following table summarizes the key housing market indicators for selected Ontario regions as of March 2025 (unless otherwise noted):

Table 1: Ontario Housing Market Snapshot (March 2025)

Note: Monthly changes for Mississauga and Brampton are based on January 2025 data as March 2025 MoM % change was not available. Yearly changes are for March 2025 vs March 2024.

Market Forecasts: An Uncertain Path Forward

Looking ahead, major housing market forecasters significantly tempered their expectations for Ontario in 2025, citing the prevailing economic uncertainties.

CREA, in its April 2025 update, drastically downgraded its national forecast. Initially projecting an 8.6% increase in national home sales for 2025 back in January, CREA revised this outlook to essentially flat activity, predicting 482,673 sales (-0.02% change from 2024). This revision was explicitly linked to the tariff uncertainty and its impact on buyer confidence. Correspondingly, the national average home price forecast for 2025 was lowered by approximately $30,000 to $687,898, representing a slight year-over-year decrease of 0.3%. Crucially for the provincial outlook, CREA anticipated that Ontario, along with British Columbia, would experience small average price declines in 2025, contrasting with modest growth expected in other provinces. A modest recovery is anticipated for 2026, with national sales forecast to rise by 2.9% and prices by 1.2%, though sales would still remain below the half-million mark for the fourth consecutive year.

The Canada Mortgage and Housing Corporation (CMHC), in its Spring 2025 Housing Market Outlook, also underscored the significant uncertainty clouding the forecast horizon, primarily due to potential U.S. trade tariffs and changes to federal immigration targets. CMHC projected modest Canadian economic growth for 2025, with improvements expected in 2026 and 2027.

Housing starts nationally were expected to slow down between 2025 and 2027, mainly due to reduced condominium apartment construction, although total starts were projected to remain above the 10-year average, supported by rental apartment construction.

The resale market recovery was forecast to be uneven, with the condominium segment, particularly in regions reliant on investor activity, expected to lag. CMHC anticipated faster price growth in 2025 followed by a slowdown in 2026-2027, with affordability improving slightly compared to the 2022-2024 period. Specific to Ontario, CMHC projected that weaker resale and rental markets would dampen demand for pre-construction condominium apartments, leading to a slowdown in new construction starting in 2025.

Ontario's Mortgage Landscape

Mortgage Lenders in Ontario: Banks, Credit Unions, and Alternatives

Ontario's vibrant, albeit currently challenged, real estate market is served by a diverse array of mortgage lenders catering to various borrower needs. The landscape is dominated by Canada's Big Six Banks – Royal Bank of Canada (RBC), TD Bank Group (TD), Scotiabank, Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal (BMO), and National Bank of Canada – which are the largest mortgage lenders both provincially and nationally. Data from CMHC indicated that as of the first quarter of 2024, these six institutions collectively held 73.1% of the total outstanding residential mortgage debt in Canada.

Credit unions, regulated provincially by the Financial Services Regulatory Authority of Ontario (FSRA), represent another significant segment of the market. Nationally, they held 13.1% of outstanding mortgage debt in Q1 2024. Prominent Ontario-based credit unions include Meridian Credit Union, FirstOntario Credit Union, Alterna Savings, DUCA Credit Union, and Kawartha Credit Union. Historically, credit unions have demonstrated stronger market penetration in smaller Ontario communities compared to major urban centres like Toronto.

Beyond traditional banks and credit unions, a growing ecosystem of alternative and private lenders plays an increasingly crucial role. This category includes Mortgage Investment Corporations (MICs), Mortgage Investment Entities (MIEs), individual private lenders, private lending firms, and specialized B-lenders. These lenders often serve borrowers who may not meet the stringent criteria of traditional institutions, such as self-employed individuals, those with impaired credit histories, or newcomers lacking extensive Canadian credit records. Examples of specialized lenders focusing on niche segments include Wealth One Bank of Canada (targeting newcomers and those with foreign income) and Home Bank/Home Trust Company (focusing on alternative mortgage solutions for borrowers with credit challenges or non-traditional income).

The rise of digital technology has also introduced digital-only lenders, offering mortgage products primarily online. Key players in this space include Equitable Bank (operating EQ Bank), motusbank (a subsidiary of Meridian Credit Union), Simplii Financial (a division of CIBC), Manulife Bank, and Tangerine (a subsidiary of Scotiabank.

Major Lender Profiles: Financial Health and Portfolio Size

The scale of operations varies significantly among the different types of lenders active in Ontario. The Big Six banks manage vast residential mortgage portfolios, reflecting their dominant market share. Based on their most recent financial disclosures (primarily Q1 or Q2 2025, or Fiscal Year 2024), their Canadian residential mortgage portfolios were substantial:

• RBC: $410 billion (Q1 2025)





• TD Bank: $266.4 billion (Q2 2024)





• Scotiabank: $304 billion (Q1 2025)





• CIBC: $265 billion (Q1 2024) 





• BMO: $151.8 billion (Q2 2024)





• National Bank: $95.0 billion (Residential Mortgages only, FY 2024)

Selected major Ontario credit unions also hold significant mortgage assets, albeit on a smaller scale than the national banks:

• Meridian Credit Union: $12.49 billion (Residential Mortgages, FY 2024)  (Total Assets: $26.6B ⁶⁵)





• Desjardins Group (National): $289.6 billion (Total Loans, net, FY 2024)  (Total Assets: $470.9B )





• Alterna Savings: $5.40 billion (Residential Mortgages, FY 2024) 





• FirstOntario Credit Union: $4.25 billion (Residential Mortgages, FY 2024)  (Total Assets: $6.6B)

Key alternative and digital lenders also manage substantial mortgage books:

• Equitable Bank: $69.3 billion (Loans Under Management, Q1 2025), including $20.2 billion in its Uninsured Single-Family Alternative Portfolio 





• Manulife Bank: $23.7 billion (Mortgage Loans, Q2 2024) 





• First National Financial LP: 155.4billion(MortgagesUnderAdministration, Q1 2025)

The Role of Mortgage Brokers: Facilitating Choice

Mortgage brokers play a significant role in Ontario's mortgage market, acting as intermediaries connecting borrowers with a wide range of lenders. The sector has seen substantial growth in licensed professionals over the past several years. As of August 1, 2024, FSRA licensed 1,193 mortgage brokerages, employing 2,925 mortgage brokers, 5,203 Level 2 mortgage agents, and 9,937 Level 1 mortgage agents, for a total of 18,065 licensed individuals. This represents nearly 12% growth in the total number of brokers and agents compared to June 2019, although it marks a slight decrease from the peak numbers seen in 2022 and 2023.

In terms of market activity, FSRA reported that licensed brokers and agents facilitated 265,000 mortgage transactions worth over $148 billion in Ontario during 2023. This volume represents a significant slowdown from 2022, when the brokered channel handled approximately 341,000 mortgages valued at $193 billion, reflecting the broader market cooling experienced that year.

Several large mortgage brokerage networks have a substantial presence in Ontario, providing platforms and support for thousands of individual brokers and agents. Dominion Lending Centres Group (DLCG), Canada's only publicly traded mortgage brokerage, reported funding $67.4 billion in mortgages across Canada in 2024, a notable 19% increase from the previous year. As of the end of 2024, DLCG operated through 514 franchises and comprised 8,663 brokers and agents. Its major subsidiaries include Mortgage Architects and The Mortgage Centre. M3 Financial Group, another major player, claims to be the largest non-bank mortgage originator nationally, reporting over $65 billion in funded volume on a trailing 12-month basis (as of early 2025) through its network of over 8,500 brokers and partnerships with more than 133 lenders. M3's well-known brands include Verico, Invis, Mortgage Intelligence, Mortgage Alliance, and Multi-Prêts Mortgages. Other significant brokerages operating in Ontario include Butler Mortgage, Centum Financial Group, CanWise Financial (often associated with Ratehub), intelliMortgage (associated with nesto), and Northwood Mortgage.

The strong performance reported by large networks like DLCG in 2024, showing a 19% increase in funded volume, contrasts sharply with the overall decline in brokered mortgage volume reported by FSRA for 2023 (down 22% by number, 27% by value). While the timeframes differ slightly, this divergence suggests that the broker channel may have experienced a rebound in 2024 after the 2023 dip, or that larger networks are successfully capturing a larger share of the market, potentially benefiting from increased activity in mortgage renewals or the growing alternative lending segment, which heavily utilizes the broker channel.

Regulatory Oversight: Framework and Recent Changes

The mortgage industry in Ontario operates within a multi-layered regulatory framework involving both federal and provincial bodies. Federally regulated institutions, primarily chartered banks, are overseen by the Office of the Superintendent of Financial Institutions (OSFI), which sets prudential guidelines related to capital adequacy, underwriting standards, and risk management. The Financial Consumer Agency of Canada (FCAC) focuses on consumer protection aspects for federally regulated entities. Deposit insurance for federal institutions is provided by the Canada Deposit Insurance Corporation (CDIC).

Provincially, the Financial Services Regulatory Authority of Ontario (FSRA), which succeeded the Financial Services Commission of Ontario (FSCO), regulates credit unions, mortgage brokerages, mortgage administrators, and individual mortgage brokers and agents operating within Ontario. The Deposit Insurance Corporation of Ontario (DICO) provides deposit insurance for provincially regulated credit unions.

Mortgage brokers and agents must be licensed by FSRA to conduct business in Ontario. Private lenders who deal directly with the public also require licensing, though an exemption exists if they source borrowers exclusively through a licensed mortgage brokerage. Borrowers are advised to verify the license status of their broker or agent via FSRA's public registry.

Key legislation governing the sector includes the federal Bank Act and the provincial Credit Unions and Caisses Populaires Act, 1994, Mortgages Act, 1990, and the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA).

Recent years have seen notable adjustments and new guidance from both federal and provincial regulators, reflecting evolving market conditions and risks:

OSFI Changes (Late 2024 / Early 2025):

• Mortgage Qualifying Rate (MQR) Exemption: Effective November 21, 2024, OSFI exempted uninsured mortgages being switched (transferred) to a different lender at renewal from the MQR, commonly known as the stress test. This change aims to promote competition by making it easier for borrowers with good payment histories to shop around for better rates at renewal without having to re-qualify at the higher stress test rate. However, the MQR itself, which applies to new uninsured mortgages and refinances, remains unchanged at the greater of the contract mortgage rate plus 2% or 5.25%.





• Loan-to-Income (LTI) Limits: OSFI announced plans to implement portfolio-level LTI limits on institutions' uninsured mortgage books, signaling a move towards managing risks associated with high household indebtedness relative to income.





• Focus on Non-Financial Risks: OSFI introduced or updated several guidelines emphasizing non-financial risks, including operational resilience (Guideline E-21), third-party risk management (Guideline B-10), integrity and security (countering foreign interference), and culture risk management, with various effective dates in 2024, 2025, and 2026. This reflects a broader regulatory shift towards ensuring institutional resilience beyond traditional financial metrics.

FSRA Changes/Guidance (2023-2024):

• Mortgage Suitability: In June 2023, FSRA finalized guidance clarifying expectations for brokers and agents regarding mortgage product suitability assessments, emphasizing the need to understand client needs and recommend appropriate products.





• Licensing Suitability: Guidance finalized in July 2024 outlines factors affecting the suitability of individuals to hold a mortgage broker or agent license, focusing on past conduct and enhancing professionalism.





• Mortgage Administrator Oversight: Guidance finalized in November 2023 clarified financial filing requirements for mortgage administrators and expanded the scope of required compliance audits effective for fiscal years ending after December 31, 2024, aiming to better protect investor funds.





• Supervision Priorities: FSRA's 2024-25 supervision plan continues to prioritize consumer protection risks related to product suitability, cost of borrowing disclosures, fair treatment, fraud prevention (both fraud-for-shelter and fraud-for-profit), and the adequacy of supervision by principal brokers, particularly within large brokerages. Recent thematic reviews identified deficiencies in disclosures (costs, conflicts, risks) and conflict of interest management at some large firms.





• Anti-Money Laundering (AML): New AML requirements have been introduced for the mortgage sector.

Housing and Mortgage Affordability in Ontario

Housing affordability remains a central challenge in Ontario, particularly in major urban centres. Examining average mortgage payments, down payment requirements, and typical loan amounts provides insight into the financial hurdles faced by prospective homebuyers.

Based on CMHC data analyzed by Forbes Advisor for the second quarter of 2024, the average monthly payment for new mortgage loans in Ontario was $2,646. This provincial average masks significant regional disparities. For instance, the average monthly payment in Toronto was considerably higher at $3,121, while in Ottawa-Gatineau it was $1,905. Other cities showed varying levels, highlighting the diverse cost structures across the province (see Table 3). These figures represent substantial increases compared to historical levels, driven by both higher home prices and elevated interest rates over the past few years.

Table 3: Average Monthly Mortgage Payments by Major Ontario City (Q2 2024)

The down payment requirement also presents a significant barrier. For the average Ontario home priced at $860,545 (March 2025), the minimum required down payment is $61,055 (calculated as 5% on the first $500,000 plus 10% on the remaining $360,545), representing 7.1% of the purchase price. This results in a required mortgage amount of $799,491 (before potential CMHC insurance premiums). To avoid mortgage default insurance, a 20% down payment of $172,109 would be needed, reducing the mortgage amount to $688,436.

In Toronto, where the average price exceeded $1.1 million in March 2025 ($1,110,924), homebuyers face even steeper requirements. Since the purchase price is over $1 million, mortgage insurance is unavailable, and a minimum down payment of 20% ($222,185) is mandatory. This leaves a required mortgage amount of 888,739.

Interestingly, the average new mortgage amount taken out by borrowers is often significantly lower than the amount required based on average prices and minimum down payments. While recent (2024) data for average new mortgage amounts by city was not available in the provided snippets, data from 2023 showed the average new mortgage in Ontario was $406,421, and in Toronto, it was $482,933. This discrepancy suggests that the typical homebuyer makes a down payment substantially larger than the minimum requirement.

Table 5: Average New Mortgage Amount by Major Ontario City (2023)

Data from major banks regarding the average Loan-to-Value (LTV) ratios within their uninsured mortgage portfolios corroborates this observation. Lower LTV ratios imply higher down payments. Recent disclosures show average LTVs for uninsured portfolios generally ranging from 50% to 56%, indicating average down payments of 44% to 50% for these borrowers. This considerable gap between the minimum required down payment and the apparent reality for many buyers, particularly those securing mortgages from major banks, underscores the significant financial capacity needed to enter the Ontario housing market. It suggests that either buyers are bringing substantial equity/savings to the table, or that qualification hurdles (like income tests) effectively necessitate larger down payments than the regulatory minimums.

Table 6: Average LTV for Uninsured Mortgage Portfolios at Major Banks (Recent Disclosures)

Mortgage Arrears and Default Risk: Monitoring Stability

Despite affordability pressures and rising interest rates over the past few years, mortgage arrears rates in Ontario and Canada remain relatively low by historical standards, though they have shown an upward trend from pandemic-era record lows.

The national mortgage arrears rate (loans 90+ days overdue) reported by the Canadian Bankers Association (CBA) reached 0.22% in January 2025, the highest level since March 2021 but still below the pre-pandemic rate of approximately 0.28%. CMHC data similarly showed the national rate at 0.192% in the second quarter of 2024, up from a low of 0.14% in 2022. Ontario's arrears rate, specifically, was reported at 0.19% in late 2024/early 2025, among the lowest in the country but also reflecting the recent uptick.

A significant area of focus is the upcoming wave of mortgage renewals. An estimated 1.2 million mortgages nationally are set to renew in 2025, with another 980,000 renewing in 2026. A large majority (85%) of the 2025 fixed-rate renewals were initially contracted when the Bank of Canada's policy rate was at or below 1%. This implies that many borrowers will face significantly higher interest rates upon renewal, leading to potentially substantial increases in monthly payments (payment shock). While the Bank of Canada's rate cuts initiated in mid-2024 provide some relief compared to peak rates seen in 2023, the difference between ultra-low origination rates (often below 2%) and current renewal rates (around 4% or higher) remains considerable.

Rising delinquency rates in other consumer credit categories, such as auto loans and credit cards, are also being monitored closely, as these can sometimes serve as leading indicators for future mortgage stress. While widespread mortgage defaults have not materialized, the combination of rising arrears from historic lows, the impending renewal wave at higher rates, and stress in other consumer debt segments suggests that underlying financial pressure on households is mounting. Regulatory encouragement for lenders to work proactively with struggling borrowers on solutions like extended amortizations may be mitigating more severe outcomes, but the situation warrants continued monitoring.

Should a borrower default on their mortgage (typically defined as being delinquent for more than three months), lenders in Ontario can initiate a power of sale process under the provincial Mortgages Act. This allows the lender to sell the property to recover their losses. The process generally requires the lender to provide written notice to the borrower at least 45 days before the sale can occur, and this notice can be issued as early as 15 days after the default.

Support for Newcomers: Accessing the Market

Newcomers to Canada often face unique challenges when trying to enter the housing market, primarily due to a lack of established Canadian credit history. Recognizing this barrier, various programs and initiatives exist to assist newcomers with obtaining mortgage financing in Ontario.

Major Canadian banks, including RBC, Scotiabank, TD, and CIBC, offer specialized mortgage programs tailored to the needs of newcomers. Other lenders, such as credit unions like Alterna Savings, may also provide specific incentives or flexible underwriting for this demographic.

CMHC offers a dedicated \"Newcomers\" stream within its mortgage loan insurance programs, available to both permanent residents and non-permanent residents with valid authorization to work in Canada (e.g., a work permit). Key eligibility criteria for CMHC insurance under this program (based on latest available information) include:

Residency Status: Must be a permanent resident or have legal authorization to work in Canada.

Creditworthiness: A minimum Canadian credit score of 600 is required for at least one borrower or guarantor. Crucially, if limited Canadian credit history exists, CMHC allows for alternative methods to establish creditworthiness. This can include providing an international credit report, a letter of reference from a financial institution in the country of origin, or documented proof of timely payments for other obligations (like rent, utilities, insurance premiums, or regular savings) over the preceding 12 months.

Down Payment: Permanent residents can access CMHC insurance with a minimum down payment starting at 5% (for 1-2 unit properties, following standard down payment rules) and can purchase owner-occupied or rental properties (up to 4 units). Non-permanent residents, however, require a minimum down payment of 10% and are restricted to purchasing 1-unit, owner-occupied properties only. The down payment must generally come from traditional sources like savings or gifts, although non-traditional sources (like unsecured loans) may be permissible for certain high-ratio loans for permanent residents.

Property Value: The maximum purchase price or lending value for CMHC-insured homeowner loans is $1.5 million (effective Dec 15, 2024). For small rental properties (2-4 units), the cap is $1 million.

Amortization: The maximum amortization period for CMHC-insured loans is generally 25 years. However, recent federal changes allow for 30-year amortizations for insured mortgages taken out by first-time homebuyers purchasing newly constructed homes.

Debt Service Ratios: Borrowers must meet standard debt servicing limits: a maximum Gross Debt Service (GDS) ratio of 39% and a maximum Total Debt Service (TDS) ratio of 44%.

Foreign Buyer Ban Compliance: The property purchase must not contravene the Prohibition on the Purchase of Residential Property by Non-Canadians Act.

These programs aim to provide newcomers with a pathway to homeownership by offering flexibility around credit history requirements and accommodating various down payment levels.

Qualifying for Optimal Rates: Key Factors

Securing the most favourable mortgage rates in Ontario typically depends on a combination of factors related to the loan type and the borrower's financial profile.

Mortgages are broadly categorized as insured or uninsured. High-ratio mortgages, those with a down payment of less than 20% of the purchase price, legally require mortgage default insurance from providers like CMHC, Sagen, or Canada Guaranty. While this insurance adds a premium cost (usually capitalized onto the mortgage balance), insured mortgages generally qualify for the lowest available interest rates because the insurance mitigates risk for the lender.

To be eligible for this insurance, borrowers must meet specific criteria set by the insurers and federal regulations. Key requirements for CMHC insurance, for example, include a minimum credit score of 600, maximum GDS/TDS ratios of 39%/44%, a purchase price below $1.5 million (as of Dec 15, 2024), and a maximum amortization period of 25 years (with the potential exception for first-time buyers of new builds allowing 30 years).

Mortgages with a down payment of 20% or more do not require default insurance and are termed \"uninsured\" or \"conventional.\" However, a subset of these, known as \"insurable\" mortgages, can still qualify for highly competitive rates, often similar to insured rates. These are uninsured mortgages that would have met all the eligibility criteria for insurance (e.g., purchase price under $1.5M, amortization ≤ 25 years, meeting GDS/TDS and credit score thresholds) even though insurance wasn't required due to the larger down payment.

Mortgages that do not meet these insurability criteria (e.g., purchase price over $1.5M, amortization longer than 25 years, refinances) are considered \"uninsurable\" and typically carry slightly higher interest rates compared to insured or insurable loans.

The majority of mortgages held by major banks in Ontario fall into the uninsured category. Recent disclosures indicate that between 72% and 83% of the residential mortgage portfolios of the Big Six banks consist of uninsured loans (see Table 7).

Table 7: Insured vs. Uninsured Mortgages at Major Banks (Recent Disclosures)

In summary, borrowers with strong credit profiles, manageable debt levels, and mortgages qualifying for insurance or meeting insurability standards generally have access to the lowest mortgage rates in the Ontario market. Higher income levels also play a role by enabling qualification for larger loan amounts.