5-year Fixed Term*
4.84%
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Ontario Mortgage Rates
| Term | Rate | Lock in Your Rate |
|---|---|---|
| 2-Year - Fixed | 5.89% | Get This Rate |
| 3-Year - Fixed | 5.04% | Get This Rate |
| 5-year - Fixed | 4.84% | Get This Rate |
| 5-year - Variable | 6.25% | Get This Rate |
Your Guide to Getting the Best Mortgage Rates in Ontario
Cascade Mortgage Capital is your best bet when you are looking for a mortgage in Ontario. We can help you with any kind of mortgage, no matter what the market conditions are. With our expertise, we can provide the highest quality of service to make sure that you know all the ins and outs of getting a mortgage!
About Ontario
Ontario is Canada’s second-largest province in Canada, and it borders Quebec on the east and Manitoba to the west, Hudson Bay and James Bay to the north, and the St Lawrence River and Great Lakes to the south. Ontario is the type of place where there’s a lot of variety in geography. It has farmland, rocky hills and even mineral rich soil in some spots.
Key facts about Ontario:
Ontario is the most populous province in Canada and the second largest in land area.
It has a population of more than 13 million people.
The capital city is Toronto, which is home to over 2.7 million people.
Ontario has diverse rang of businesses from mining minerals to manufacturing automobiles. Its home to more than 100,000 businesses that employ more than 3 million people.
The average temperature for Ontario is quite drastic and varies from -19 degrees Celsius in January to over 30 degrees Celsius in July.
Ontario has many cultural festivals and events throughout the year including Winterlude, Luminato Festival and Toronto International Film Festival. It attracts travellers from around the world.
About the Ontario Housing Market
Ontario is a hot spot for residential real estate and it has not slowing down from 2021 into the early part of 2022. The average increase in the majority of regions in the province gained 20-35.5%, While metropolises like Toronto and Mississauga and saw gains of a below 20%.
Condominiums and townhouses saw more growth in smaller suburban areas such as Kitchener, London, North Bay and Peterborough.
Lots of people are looking to buy in Ontario, so it’s hard to find a place. Multiple offers also make houses expensive and very difficult to obtain with over biding.
First-Time Home Buyer Programs in Ontario
There are many different first-time home buyer incentives and programs in Ontario that can help people buy a house more easily. The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The HBP allows you to pay back the withdrawn funds within a 15-year period. See: First-Time Home Buyer Programs in Canada
Closed Mortgage vs. Open 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.
Mortgage Stress Test
The mortgage stress test requires banks to check that a borrower can still make their payment at a rate that’s higher than they actually pay.
Here’s how it works. When you apply for a mortgage you’ll be offered a contracted rate – hopefully, this will be as low as possible! However, your bank needs to check you’ll be able to pay back your mortgage, even if your mortgage rate rises during your mortgage term.
To do this, they check your ability to make your payments based on The Bank of Canada qualifying rate, which is based on the mode average of posted 5-year fixed rates from Canada’s big banks. The Bank of Canada qualifying rate was 4.79%, but in June 2021, the minimum qualifying rate increased to 5.25%.
This means that your income needs to be high enough, and your existing debt low enough, to be able to pay down your mortgage at that higher rate. Generally, this will result in you being able to borrow a smaller amount of money.
Variable Rates vs. Fixed Rates
A variable-rate mortgage fluctuates with the lender’s prime rate throughout your mortgage term. While your mortgage payment will remain the same throughout 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.
A fixed-rate mortgage keeps your interest rate steady over the term of your mortgage. Historically, variable rates have paid off for Canadians over time, as a variable-rate mortgage often allows you to take advantage of lower rates as the interest rate is calculated on an ongoing basis at a lender’s prime rate minus a set percentage. Still, many conservative borrowers would rather pay more for the security of a fixed rate option than have to worry about the fluctuation of a variate rate alternative.
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. Your decision should be based on your tolerance for risk as well as your ability to withstand increases in mortgage payments. This is where our expert support is even more invaluable.
Pre-payment option
Prepayment privileges enable you to make extra payments each year up to a certain amount based on your lender’s specific rules. It’s a great option to have because every dollar you pay towards the principal balance of your mortgage reduces the overall interest you’ll pay. This can shave a lot of time off the number of years it’ll take you to become mortgage free
There are a number of ways you can take advantage of prepayments, including:
- Lump-sum payments – Use work bonuses, inheritances or extra savings to your advantage
- Payment schedule – Switch your payment frequency to accelerated bi-weekly mortgage payments. With this option, you’re making one additional monthly payment per year, which can really add up over time
- Increase regular payments – Rounding up your regular mortgage payments even a few dollars each cycle can help your balance decline sooner
How much do i need for downpayment
A down payment is the amount of money you put towards the purchase of a home. Your lender deducts the down payment from the purchase price of your home. Your mortgage covers the rest of the price of the home.
The minimum amount you need for your down payment depends on the purchase price of the home.
If your down payment is less than 20% of the price of your home, you must purchase mortgage loan insurance.
| Purchase price of your home | Minimum amount of down payment |
|---|---|
| $500,000 or less |
|
| $500,000 to $999,999 |
|
| $1 million or more |
|
If you’re self-employed or have a poor credit history, your lender may require a larger down payment.
Normally, the minimum down payment must come from your own funds. It’s better to save for a down payment and minimize your debts.