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Getting A Mortgage In Ontario

Author: Lisa Rennie

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Lisa Rennie

Senior Contributor at Loans Canada

Lisa has worked as a personal finance writer for over a decade, creating unique content to help educate Canadian consumers. Expertise:

• Personal finance
• Real estate
• Mortgage financing
• Investing

Reviewed By: Priyanka Correia, BComm

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Priyanka Correia, BComm

Senior Editor at Loans Canada

As a senior member of the Loans Canada team, Priyanka Correia is committed to empowering Canadians with the knowledge they need to make smart financial choices.
Expertise:

• Personal finance
• Consumer borrowing
• Consumer banking
• Debt management

📅

Updated On: August 7, 2025

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		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
19	1746662400		$250 - $1,500	$14 per $100	Up to 62 days	$250 - $1,500
100	1741219200		Up to $1,000	0% interest (30.4% APR)	30 days (revolving)	Up to $1,000
20	1718582400		$100 – $1500	$8 per $100 + 24%	Up to 62 days	$100 – $1500
100	1709683200		Up to $1,250	Up to 32%	90 – 150 days	Up to $1,250
23	1700524800		Up to $25,000	24.99% – 29.99%	30 or 60	Up to $25,000
16	1700524800		$100 – $1,000	29% – 35%	9 – 24	$100 – $1,000
100	1694390400		$500 – $2,500	18.99%		$500 – $2,500
18	1695254400		$500 – $5,000	Up to 32%	3 – 4	$500 – $5,000
10	1692748800		Up to $500	0%	Up to 65 days	Up to $500
100	1688083200		$150 – $1,600	10 – 35%	3 – 6	$150 – $1,600
100	1686182400		$300 – $3,000	18% + fees	6	$300 – $3,000
100	1686182400		$300 – $3,000	18% + fees	6	$300 – $3,000
100	1686182400		$300 – $3,000	18% + fees	6	$300 – $3,000
22	1683676800		$15,000	6.7%	Up to 60	$15,000
9	1670889600		$1,000 – $15,000	19.9% – 34.9%	–	$1,000 – $15,000
11	1666051200		$250	0%	–	$250
100	1643932800		$500 – $15,000	Starting at 18.9%	6 – 60	$500 – $15,000
100	1642723200		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1623369600		Varies	0%	6 or 8 weeks	Varies
1	1620777600		Up to $35,000	9.99% – 34.95%	6 – 60 months	Up to $35,000
24	1607558400		$500 – $50,000	Varies	6 – 60	$500 – $50,000
100	1600646400		$1,000 – $35,000	12.99% – 29.99%	12 – 84	$1,000 – $35,000
100	1598918400		Up to $15,000	–	–	Up to $15,000
100	1598832000		$500 – $15,000	Start at 10.99%	9 – 60	$500 – $15,000
100	1551830400		Up to $500,000	5.75% – 9.9%	–	Up to $500,000
19	1582243200		–	9.9% – 29.9%	12 – 60	–
100	1581033600		$5,000+	–	Up to 60	$5,000+
100	1580860800		$1,500 – $10,000	–	12 – 60	$1,500 – $10,000
17	1580774400		$1,000 – $25,000	8.99% – 34.99%	36 or 60 months	$1,000 – $25,000
100	1579478400		$100 – $1,500	$14 per $100	–	$100 – $1,500
7	1579478400		Up to $20,000	19.8% – 34.99%	36 – 85 months	Up to $20,000
100	1579219200		Up to $1,500	$14 per $100	Up to 30 days	Up to $1,500
100	1576713600		$500 – $100,000	Starting at 12.99%	Up to 60	$500 – $100,000
100	1562198400		$500 – $15,000	15.99 – 35%	6 – 60	$500 – $15,000
10	1552262400		$500 – $25,000	29.9% or 34.28%	6 – 84 months	$500 – $25,000
100	1551830400		$100 – $1,000	$14 per $100	14 days	$100 – $1,000
100	1551830400		$1,000 – $15,000	19% – 34.95%	12 – 60	$1,000 – $15,000
100	1551398400		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1551398400		$100 – $1,500	$14 per $100	14 – 31 days	$100 – $1,500
100	1551398400		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1546128000		Up to $5,000	19.9% – 35%	6 – 36	Up to $5,000
100	1551139200		$250 – $1,250	29% – 32%	3 – 6	$250 – $1,250
15	1551139200		Up to $15,000	34.99%	Open-ended	Up to $15,000
100	1550534400		$100 – $1,500	$14 per $100	14 days	$100 – $1,500
2	1569974400		Up to $1,500	$14 per $100	Up to 62 days	Up to $1,500
100	1550534400		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1550534400		$500 – $1,000	23%	3 – 6	$500 – $1,000
100	1550534400		$300 – $1,000	Up to 38%	3 – 4	$300 – $1,000
100	1549411200		$100 – $1,500	$14 per $100	14 days	$100 – $1,500
100	1549411200		$1,000 – $15,000	34.37%	9 – 60	$1,000 – $15,000
100	1567555200		$300 – $3,000	18% + fees	6	$300 – $3,000
100	1549238400		$100 – $1,500	$14 per $100	Up to 62 days	$100 – $1,500
100	1549238400		$250 – $1,500	23.99% – 29.99%	3 – 4	$250 – $1,500
20	1548720000		$500 – $1,000,000	7.9%	12	$500 – $1,000,000
100	1548720000		$500 – $50,000	Starting at 8.99%	3 – 120	$500 – $50,000
11	1545264000		$500 – $100,000	12.99% – 34.99%	9 – 60 months	$500 – $100,000
100	1545264000		$500 – $10,000	Starting at 9.90%	12 – 36	$500 – $10,000
6	1543622400		Up to $60,000†	19.99% – 34.99%*	6 – 120 months	Up to $60,000†
100	1545350400		$300 – $1500	Starting at 18%	3 – 7	$300 – $1500
100	1545350400		$300 – $3,000	22% – 32%	3 – 4	$300 – $3,000
12	1545350400		Up to $7,000	35%	6 – 60	Up to $7,000
15	1545350400		$500 – $1000	Up to 32%	3	$500 – $1000
100	1545350400		$500 – $750	23%	3 – 4	$500 – $750
100	1545350400		$500 – $750	22%	90 – 120 days	$500 – $750
100	1545350400		$300 – $3,000	27% – 35%	90 – 120 days	$300 – $3,000
5	1545264000		$500 – $150,000	9.99% – 34.99%	9 - 240	$500 – $150,000
4	1545264000		Up to $5,000	34.37%	–	Up to $5,000
8	1568937600		$500 – $10,000	Up to 34.99%	Up to 60 months	$500 – $10,000
21	1545177600		Up to $35,000	Starting at 12.99%	Up to 60 months	Up to $35,000
13	1545177600		$100 – $20,000	Up to 35%	Up to 60	$100 – $20,000

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
4	1754438400		Up to 1 million	N/A	12 months	Up to 1 million
100	1745452800		$10,000 - $1,000,000	12% +	3 - 24	$10,000 - $1,000,000
9	1725321600		Up to $40,000	$0.75 per $1,000 per day	–	Up to $40,000
4	1714089600		$10,000 – $20,000,000	–	–	$10,000 – $20,000,000
3	1714089600		$10,000 – $2,000,000	10%+	Up to 36	$10,000 – $2,000,000
5	1669852800		$10,000 – $300,000	–	3 – 24	$10,000 – $300,000
100	1648512000		$1000 - $250,000	–	–	$1000 - $250,000
100	1620345600		–	–	12 – 60	–
100	1611878400		–	–	–	–
24	1607558400		$500 – $50,000	Varies	6 – 60	$500 – $50,000
100	1603756800		–	–	–	–
100	1598918400		–	–	–	–
100	1592438400		–	–	–	–
100	1585612800		–	–	6 – 60	–
100	1580947200		$200,000 – $5,000,000	–	–	$200,000 – $5,000,000
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		$5,000 – $1,000,000	–	–	$5,000 – $1,000,000
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580688000		Up to $10,000	Prime + 2.5%	Up to 60	Up to $10,000
2	1580256000		$5,000 – $800,000	–	6 – 24	$5,000 – $800,000
100	1579478400		$10,000 – $30,000,000	–	–	$10,000 – $30,000,000
100	1579478400		$50,000 – $5,000,000	–	3 – 36	$50,000 – $5,000,000
100	1579478400		–	–	24 – 60	–
100	1579478400		–	–	–	–
100	1579478400		Up to $1,200,000	–	12 – 84	Up to $1,200,000
100	1579046400		–	–	–	–
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1575849600		$5,000 – $150,000	Starting 15%	6 – 24	$5,000 – $150,000
100	1575849600		Up to $250,000	–	–	Up to $250,000
100	1575590400		–	–	–	–
100	1575590400		–	–	–	–
1	1545955200		$1,000 – $300,000	–	12 – 120	$1,000 – $300,000
100	1552262400		$500,000 - $10,000,000	–	–	$500,000 - $10,000,000
100	1552262400		–	–	–	–
100	1552262400		–	–	–	–
100	1552262400		Up to $250,000	–	Up to 10 years	Up to $250,000
100	1552262400		Up to $1,000,000	–	–	Up to $1,000,000
100	1551830400		–	–	–	–
100	1551830400		$10,000+	–	Up to 15 years	$10,000+
100	1551830400		Up to $1,000,000	–	Up to 15 years	Up to $1,000,000
100	1551830400		Up to $500,000	–	Up to 15 years	Up to $500,000
100	1551830400		-	–	Up to 84	-
100	1551398400		$3,500+	–	–	$3,500+
100	1551398400		$5,000+	4.9% – 24.99%	18 – 48	$5,000+
100	1551398400		$10,000 – $1,000,000	4% – 14%	12 – 84	$10,000 – $1,000,000
100	1551139200		Up to $250,000	–	Up to 48	Up to $250,000
100	1550534400		$500 – $50,000	2.75% – 8.25%	12 week cycles	$500 – $50,000
100	1550534400		$1,000 – $1,000,000	6% – 20%	–	$1,000 – $1,000,000
100	1550534400		Up to $5,000,000	–	24 – 72	Up to $5,000,000
100	1550534400		$5,000 – $200,000	–	–	$5,000 – $200,000
100	1549411200		$50,000 – $12,000,000	–	24 – 96	$50,000 – $12,000,000
100	1548720000		Up to $100,000	–	–	Up to $100,000
100	1548720000		$10,000 – $300,000	–	–	$10,000 – $300,000
100	1545264000		Up to $250,000	–	3 – 24	Up to $250,000
8	1545350400		$15,000 – $1,500,000	–	6 – 36	$15,000 – $1,500,000
6	1545177600		$5,000 – $300,000	9% – 35%	Varies by product	$5,000 – $300,000
7	1545177600		$5,000 – $500,000	4.96% – 24.93%	1 – 60	$5,000 – $500,000

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
100	1749600000		–	–	Up to 96 months	–
19	1582243200		–	–	Up to 60 months	–
6	1543622400		Up to $60,000†	19.99% – 34.99%*	6 – 120 months	Up to $60,000†
5	1545264000		$500 – $150,000	9.99% – 34.99%	9 - 240	$500 – $150,000
100	1620345600		–	–	Up to 96 months	–
2	1679529600		Varies	Varies	24 – 96 months	Varies
100	1643846400		$250 – $10,000	Starting at 14.99%	12 – 36	$250 – $10,000
3	1632960000		Min. $10,000	6.93% – 19.99%	18 – 96	Min. $10,000
8	1624233600		$5,000 – $75,000	–	12 – 96	$5,000 – $75,000
24	1607558400		$500 – $50,000	Varies	6 – 60	$500 – $50,000
7	1606435200		$500 – $10,000	Starting at 0%	3 – 48	$500 – $10,000
100	1600646400		$1,000 – $35,000	12.99% – 29.99%	12 – 84	$1,000 – $35,000
100	1582761600		–	–	36 – 96	–
6	1582761600		–	–	–	–
100	1582761600		–	Up to 29.5%	–	–
100	1581033600		–	–	–	–
100	1580688000		–	Starting at 12.9%	–	–
100	1579478400		–	–	–	–
100	1579478400		–	–	–	–
100	1579478400		–	–	–	–
100	1579219200		–	–	–	–
100	1578873600		–	Starting at 10.99%	–	–
100	1578873600		–	–	–	–
100	1551830400		-	–	12 – 96 months	-
100	1552262400		Up to $1,000,000	–	up to 96	Up to $1,000,000
100	1551830400		–	–	6 – 96	–
100	1551830400		$10,000+	–	12 – 96 months	$10,000+
100	1551830400		Up to $1,000,000	–	Up to 15 years	Up to $1,000,000
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1575849600		–	–	–	–
100	1575849600		$5,000 – $45,000	4.90 % – 29.95%	–	$5,000 – $45,000
100	1575849600		–	–	–	–
100	1575590400		–	–	–	–
6	1569974400		–	Up to 29.99%	12 – 96	–
100	1561507200		–	–	–	–
1	1560124800		Up to $100,000	3.99% - 19.9%	24 -96	Up to $100,000
100	1551830400		–	–	–	–
100	1551830400		Up to $500,000	–	6 – 48	Up to $500,000
100	1550534400		–	–	–	–
100	1548633600		–	Starting at 4.2%	–	–
100	1545177600		–	–	12 – 84	–

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
100	1578873600		Up to $50,000	–	24 – 60	Up to $50,000
100	1545264000		Up to $50,000	–	–	Up to $50,000

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		N/A	N/A	N/A	N/A
3	1726531200		$5,000 +	6% – 16%	12 – 60	$5,000 +
7	1708473600		–	–	–	–
5	1700524800		–	-	-	–
100	1695945600		–	–	–	–
4	1690934400		–	–	–	–
2	1688601600		Min $110,000	4.14% – 6.29%	24– 120	Min $110,000
3	1679616000		$100,000 – $2,000,000	Varies	12 – 60	$100,000 – $2,000,000
4	1541030400		–	4.19% – 8.00%	6 – 120	–
100	1627344000		–	4.50% – 5.97%	12 – 60	–
100	1551830400		Up to $500,000	Starts at 8.49%	–	Up to $500,000
100	1581033600		–	4.19% – 6.04%	12 – 120	–
100	1580860800		–	–	–	–
100	1580860800		–	2.99% – 5.49%	6 – 60	–
100	1580860800		$50,000+	–	12 – 120	$50,000+
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580688000		–	–	6 – 60	–
100	1580688000		–	4.19% – 6.04%	12 – 120	–
100	1580688000		–	–	–	–
100	1579478400		–	4.54% – 7.49%	6 – 120	–
100	1578873600		–	–	–	–
100	1578268800		–	–	–	–
100	1577059200		–	Varies	–	–
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1577059200		–	4.49% – 6.63%	1 – 10 years	–
100	1574985600		$10,000 – $1,000,000	4.99% – 7.29%	12 – 120	$10,000 – $1,000,000
100	1574899200		–	–	12 – 60	–
100	1574899200		–	4.24% – 6.30%	–	–
100	1560124800		–	4.64% – 5.80%	1 – 10 years	–
100	1548806400		$10,000 – $3,000,000	Varies	12 – 24	$10,000 – $3,000,000
100	1548720000		–	–	12 – 60	–
1	1517097600		$10,000 – $500,000	Starting at 10%	–	$10,000 – $500,000

		Provider	Services	Rating
0	0		Debt Consolidation Program, Debt Settlement Program, Consumer Proposal, Bankruptcy Consultation	N/A (Referrer)
100	1743984000		Consumer Proposal, Bankruptcy
100	1576540800		Credit Counselling, Bankruptcy, Consumer Proposal
100	1576540800		Bankruptcy, Consumer Proposal
100	1576540800		Credit Counselling, Debt Management Program
100	1576368000		Credit Counselling, Debt Management Program
100	1576454400		Debt Restructuring, After Care - Credit Rebuilding Program, Corporate Debt Restructuring

Unless you have a few hundred thousand dollars in cash, you’ll likely need to take out a mortgage to finance a home purchase in Ontario. Buying a home is a big deal and a huge financial investment. Thankfully, mortgages can help make your dreams of buying a home in Ontario a reality.

Here is everything you need to know about mortgages in Ontario before applying for one.

What To Expect When Getting A Mortgage?

Getting a mortgage involves the following key factors that you should understand before applying.

Learn more: Mortgages

What Do You Need To Get A Mortgage?

To get a mortgage in Ontario, you’ll need to meet specific criteria, including the following:

• Debt-To-Income Ratio: Your debt-to-income ratio is the percentage of your monthly income that goes toward paying your monthly debts. Ideally, it should be no more than 44% to get approved for a mortgage.
• Credit Score: In Ontario, the minimum credit score needed to secure a conventional mortgage from a traditional lender is 680, though this number may fluctuate slightly based on the lender, your income, and down payment amount. 
• Down Payment: The minimum down payment needed to buy a home in Ontario is 5% of the purchase price. Down payments less than 20% will require mortgage default insurance. 
• Stress Test: Canadians who apply for a mortgage with a federally regulated lender must pass the mortgage stress test to get a home loan. This test ensures that you can afford payments if interest rates increase in the future. Right now, the threshold to qualify is 5.25% or your contract rate plus 2%, whichever is higher.

Can You Get A Mortgage With Bad Credit?

Having bad credit will shrink your options when it comes to getting a mortgage in Ontario. However, it’s still possible. 

Although your bank might not approve your mortgage application, there are other alternative lenders in Ontario who can. Many private lenders in Ontario deal specifically with bad credit borrowers and place more weight on other things that affect your ability to secure a mortgage, such as your income and down payment amount.

Not only do private mortgage lenders accept bad credit, but they may also be able to help you avoid the mortgage stress test. This is because they’re not federally regulated, which means they’re not bound by the rules set by the Office of the Superintendent of Financial Institutions (OSFI).

However, in exchange for this flexibility, private lenders typically charge higher interest rates to offset their risk. So, while you may be able to get a mortgage in Ontario with bad credit, you can expect to pay more for your loan.

How Much House Can You Afford In Ontario?

Understanding how much you can borrow is a key step in determining what you can afford in a home purchase. While having a healthy income helps, lenders also factor in your existing debt to assess your borrowing capacity. 

Two major metrics that lenders use to assess your affordability are your Gross Debt Service (GDS) ratio and Total Debt Service (TDS) ratio:

• Gross Debt Service Ratio (GDS): This metric measures the share of your gross income needed to cover housing expenses, like mortgage payments, property taxes, heating costs, and applicable condo fees. Ideally, your GDS should not exceed 39%.
• Total Debt Service Ratio (TDS): This metric includes everything in the GDS, plus other monthly obligations, such as car loans, credit card payments, and personal loans. It reflects your overall debts compared to your gross income. Your TDS should not be any higher than 44%.

Together, these ratios help lenders determine the size of mortgage you can handle without exhausting your finances.

Learn more: Mortgage Affordability

What’s The Average House Cost In Ontario?

The average price of homes in Ontario as of June 2025 is $834,050. That’s much higher than the national average of $691,643. 

That said, while Ontario may have higher average home prices compared to other provinces across the country, there are still some cities in the province that offer relatively affordable home prices. Here are the most affordable cities in Ontario for housing:

• Timmins: $310,787
• Sault Ste. Marie: $319,600
• Thunder Bay: $406,292
• Sudbury: $511,300
• Nepean: 566,000
• Windsor: $568,700
• Ottawa: $634,300

What’s The Average Condo Cost In Ontario?

Condos offer home buyers a more affordable housing option compared to single-family homes. They also come with less maintenance and tend to offer several on-site amenities. That said, condominiums have monthly fees to help cover the cost of maintenance and repairs.

Currently, the average price of a condo in the GTA-wide is $685,961, down roughly 5.9% from the same time last year.

How To Apply For A Mortgage

To get a mortgage in Ontario, follow these steps:

Step 1: Get Pre-Approved

Getting pre-approved for a mortgage can give you a clear idea of how much you can afford in a home purchase, allowing you to focus on properties that fall within your price range. Mortgage pre-approval will also show sellers that you’re a serious and qualified buyer, which can be useful in a competitive market.

To get pre-approved, you’ll likely need to undergo a credit check. You’ll also need to provide the lender with information about your income and debts.

Step 2: Get Your Down Payment Ready

As mentioned, you’ll need to come up with at least 5% of the purchase price in the form of a down payment, depending on the price of the home. In Canada, down payment requirements are as follows:

Learn more: Your Guide To Mortgage Down Payments In Canada

Step 3: Gather Your Documents

Documents needed to apply for a mortgage typically include the following:

• Personal Information Documents:
  • Government-issued photo ID 
  • Social Insurance Number (SIN)
• Employment/Income Documents:
  • Pay stubs 
  • Tax returns
  • Notice of Assessment
• Financial Documents:
  • Bank account information 
  • Statement of assets or investments
  • Proof of down payment 

Learn more: Mortgage Documents Checklist

Step 4: Get Final Approval

Once the seller agrees to your offer and all conditions are met, your lender will ask for your purchase agreement and may request additional documents to assess your financial profile, run a credit check, and arrange for a property appraisal.

You’ll also need to come up with the home deposit funds, typically within 24 hours of offer acceptance. So, make sure that these funds are easily accessible and aren’t tied up in illiquid accounts.

Step 5: Close The Deal

On closing day, you’ll finalize the purchase by signing important legal documents with your lawyer and settling closing costs, which typically range from around 1.5% to 4% of the home’s price. Once everything’s signed and paid, ownership will officially transfer to your name. 

Learn more: How To Successfully Shop For A Mortgage

What Should You Consider When Getting A Mortgage?

Choosing the right mortgage involves more than just getting a loan – it’s about financial commitment and contributing to your financial future. Given this, it’s important to consider several factors before applying. 

Fixed Or Variable Rate 

When applying for a mortgage, you’ll have the option to choose between fixed or variable rates:

• Fixed-rate mortgages: This option offers predictable mortgage payments and protects you from increasing interest rates in the near future, making them ideal for long-term stability. 
• Variable-rate mortgages: With this option, interest rates typically start lower, but may fluctuate with the prime rate. This can be a good thing if rates dip, which can save you money. But if they increase, you could be paying more in interest charges.  

Open Vs. Closed

You may have the option to choose between open and closed mortgages, depending on your need for flexibility:

• Open mortgages: This option offers the flexibility to make extra payments or pay off your loan early without penalties. However, open mortgages usually come with higher interest rates. 
• Closed mortgages: This is the more common option among Canadian homebuyers, and offers lower rates and fixed terms. However, prepayments are limited and fees are typically charged if you break the contract early. 

Mortgage Term & Amortization

It’s important to understand the difference between mortgage term and amortization, as they affect both your payments and long-term costs. 

• Mortgage term: The term refers to the length of your current contract, typically 1 to 5 years. When the term expires, you’ll need to either renew or pay off the mortgage. 
• Amortization period: This refers to the total time it takes to pay off your mortgage, often 25 to 30 years. Longer amortization periods come with lower monthly payments, but higher interest costs.  

Payment Options

Mortgages are a type of installment loan, which means you pay back the full loan amount in installments. You have a few options when it comes to how frequently your payments are made, including the following: 

• Monthly
• Bi-weekly
• Accelerated bi-weekly
• Weekly

Prepayment Options

In addition to the regular payments you make on your mortgage, you may also have the option to make prepayments to help pay your mortgage down faster. Prepayment options may include the following:

• Lump-Sum Payments: One-time payments made directly toward your principal can help you pay your loan down faster.
• Increase Regular Payments: Boost your monthly payments by a set percentage to chip away at the principal.
• Accelerated Payment Frequency: Switch from monthly to bi-weekly or weekly payments, which adds an extra payment each year.
• Double-Up Payments: Some lenders may allow you to double your regular payment once a year without penalty.

Be sure to check your loan contract to see what prepayment privileges are available to you and if any penalties apply before making extra payments.

Learn more: How To Pay Off Your Mortgage Early In Canada

Newcomers 

Newcomers to Canada may have a tougher time accessing financing for a home purchase due to the fact that they must typically start from scratch when it comes to building a credit profile. Credit scores play a key role in mortgage approval, which can put newcomers at a disadvantage.

Fortunately, mortgage solutions are available for newcomers, offering customized financing options that are designed with this demographic in mind. Big banks in Canada offer newcomer mortgage programs designed to ease the transition into homeownership. 

Costs To Budget For When Buying A House

Given the high cost of a mortgage, it’s crucial to consider all applicable expenses involved with this type of financing:

Closing Costs

Closing costs in Ontario can cost anywhere from 1.5% to 4% of the purchase price. These fees are often paid at closing in one lump sum on closing day, so you’ll need to budget for these extra costs before making an offer on a home. Closing costs can include several items, including:

• Home appraisals
• Home inspections
• Lawyer fees
• Title search 
• Insurance fees
• Adjustments
• Property surveys

Ontario Land Transfer Tax

Buyers in Ontario must pay a provincial land transfer tax, which is based on the property value. Land transfer tax rates range from 0.5% to 2.5%, with an additional luxury home tax applied to homes valued over $3 million. Plus, homes in Toronto are subject to an additional municipal land transfer tax.

Luckily, a land transfer tax rebate of up to $4,000 is available to first-time homebuyers in Ontario, and a municipal land transfer tax rebate in Toronto of up to $4,725.

Non-Resident Speculation Tax

A 25% tax applies to foreign buyers who purchase properties within the Golden Horseshoe area of Southern Ontario. The purpose of this Non-Resident Speculation Tax is to prevent housing prices in Ontario from over-inflating due to foreign investment. 

Property Tax

Property taxes are annual fees paid by homeowners to their local municipality in Ontario, based on the assessed value of their property and the local tax rate. These taxes cover essential public services, such as schools, waste management, road maintenance, and emergency services.

Learn more: Property Tax Sales In Ontario: How To Buy A Home For Cheap

Condo Fees

Condo fees are monthly payments that condo owners must pay in addition to their mortgage payments. These fees cover shared building expenses, such as maintenance, insurance, and on-site amenities. 

Condo fees can vary quite a bit, depending on location, unit size, and amenities.

Learn more: The Costs Of Owning A Home In Ontario

Things To Watch Out For When Buying A House In Ontario

Besides the costs of buying a home and taking out a mortgage in Ontario, it’s also important for homebuyers to consider other potential costs and red flags, including the following:

Water Heater Rental

In Ontario, water heater rentals are very common and are generally included in the purchase of a home, and may actually be under a rental agreement. That means you’ll need to make monthly rental payments, often for many years. This can often cost more than owning it outright. Moreover, the water heater rental company may even increase their rates along the way. Since this option is buried deep in the contract, many homeowners end up feeling misled.

In this case, it may be worth it to consider buying out the heater. Owning it outright can make more financial sense, depending on the heater’s cost and the length of the agreement. 

Mortgage Prepayment Penalties

Lenders may charge a prepayment penalty if you break your loan agreement early, pay more than your contract allows, or even refinance before the term ends. This fee can be calculated in one of two ways:

• Three months’ interest on your remaining principal
• Interest Rate Differential (IRD), which is the difference between your mortgage rate and the current posted rate

Dishonest Real Estate Agents

Real estate agents charge buyers a commission for their services, which can be anywhere from 3% to 7% of the purchase price. However, while agents are supposed to provide a fiduciary duty to their clients, some agents don’t act in good faith. This can cause serious financial issues, including:

• Misrepresenting property details 
• Failing to disclose conflicts of interest, like dual agency 
• Withholding offers 
• Neglecting legal duties, such as mishandling deposits 
• Providing false or misleading advice during negotiations 

Need Financial Help Buying A House In Ontario? Check Out These Programs

Considering the sky-high cost of housing in Ontario, many homebuyer hopefuls may be unable to make the financial leap on their own. Thankfully, several financial assistance programs may be available, spending on their eligibility.

RRSP Home Buyers’ Plan

The Home Buyers’ Plan (HBP) is provided by the federal government and lets eligible Canadians use up to $60,000 from their RRSP tax-free to help buy their first home. Normally, RRSP withdrawals are taxed as income. But under the HBP, it’s treated like an interest-free loan from yourself.

To qualify for this program, you must have a qualifying RRSP and funds saved, and you’ll repay the amount back to your RRSP over 15 years.

Multigenerational Home Renovation Tax Credit

The Multigenerational Home Renovation Tax Credit provides financial support for the construction of a secondary suite for seniors or adults with disabilities. Eligible homeowners can claim a 15% tax credit up to $50,000 for work done on their homes, which provides up to $7,500 in credits. 

Down Payment Assistance Programs

Several down payment assistance programs are available in different provinces and cities across Canada. Here are a few to check out in Ontario:

Additional Reading

Uninsured Mortgages Explained: OSFI Stress Test Changes and What They Mean for You

High Ratio Mortgages And Default Mortgage Insurance

How Many Mortgages Can You Have In Canada?

Ready to Apply For a Mortgage in Ontario?

Before you apply for a mortgage in Ontario, it’s important to get familiar with what they are and what they entail. You’ll also want to take a close look at your finances and make sure you’re ready to pay a mortgage and become a homeowner in Ontario. If you’ve determined that you’re ready, let Loans Canada help you find a mortgage specialist who can help.

FAQs

Note: Loans Canada does not arrange or underwrite mortgages, we are a comparison and simple referral platform.