As the most populous province in Canada, Ontario mortgage rates are the most competitive in the market. Finding a great mortgage rate is as important as finding a home. We will look at what types of mortgages are available to you, the current housing trend, and the frequently asked questions about mortgages.
Types of mortgages In Ontario
Ontario and all Canadian provinces will have the same mortgage options. Because Ontario has higher than average incomes, there seems to be more focus on large mortgages. Ontario’s property values are high when compared to other provinces in Canada. For this reason, borrowers are looking to make sure that their mortgage payments are as low as possible. A vast majority of borrowers have their mortgages issued by a private company.
Current mortgage rates In Ontario
Residents will be happy to see that the current mortgage rates in Ontario have declined over recent years. The rates for the best 5-year fixed and best variable have fallen below 2.4 percent. The rates are staying low currently, with little to no signs of increasing in the coming months
Ontario’s housing market
With Ontario’s provincial government implementing plans to grow the province’s population by 2041, it’s no secret that the housing market will keep getting stronger. As more people move to Ontario, the housing market will continue to rise with the growing population, especially in southern parts of the province. Also, the region has land protected by the green belt making the supply of available homes in the area limited. Homeowners residing in the area may demand a higher price should they decide to sell.
With the population growth, the mortgage rates in Ontario are expected to rise and surpass the national average.
Average house prices in Ontario
The mortgage amounts in Ontario will depend on what you can afford and where you plan to buy the house. Average home prices in select Ontario cities (according to the Canadian Real Estate Association) are as follows:
- Greater Toronto Area: $1,050,300
- Hamilton-Burlington: $879,100
- Ottawa: $671,400
As you can see, Toronto commands the highest average home cost and the highest mortgage amounts of the top three major municipal areas in Ontario. Ottawa is the lowest of the three. If you wish to live in the Sudbury area, the city boasts the lowest mortgage amount in the province, $308,000.
These amounts are calculated using an average home price in the area and a 30-year amortization term. Home purchase prices are from the Canadian Real Estate Association.
Keep in mind that if you don’t find a home in the city, you can find one in the suburbs of these major cities. Consider your commute times from home to work as a possible factor before purchasing a home.
Frequently asked questions
What are the mortgage rates in Ontario right now?
Currently, the mortgage rates in the province are at their lowest in recent years. However, the rate you get will depend on certain factors including, your LTV, credit score, and more. You will also need to choose the mortgage type, the home value, and the mortgage term to get your best rate.
Who will give you the best mortgage rates in Ontario?
There are two types of mortgage providers in Ontario: banks and mortgage brokers. If you are looking for the lowest default-insured rates and are planning on putting down less than 20 percent downpayment, a mortgage broker can help. Otherwise, a bank will be the best option for finding a mortgage if you plan on putting down 20 percent or more as a downpayment.
Will the mortgage rates in Ontario go up or down?
At this time, there are no signs of the mortgage rates increasing in 2021. The forecast calls for rates to dip slightly lower or stay the same by the end of the year.
What is the minimum required down payment for a mortgage in Ontario?
In Ontario, you can make a minimum down payment of 5% of the purchase price if your property costs $500,000 or less. If you qualify with the lender of your choice, you may be able to borrow the funds needed from a source such as a private mortgage broker or bank.
Is the lowest mortgage rate the best rate?
Surprisingly enough, the lowest mortgage rate is not always the best. It can come with cons including, high penalties. It is important to consider the terms and conditions of each mortgage. You may think that you are paying the lowest rate available, but it may not be the case.