Mortgage Costs in Ontario
Ontario has the highest average home prices in Canada, with Toronto and surrounding areas consistently ranking among the most expensive markets in the country. The average home price in the Greater Toronto Area regularly exceeds $1 million, making mortgage planning especially important for Ontario buyers.
For Ontario buyers putting less than 20% down, CMHC mortgage default insurance is required — adding 2.8–4.0% of the mortgage amount to your loan balance. For most Ontario buyers with larger loan amounts, this represents a significant added cost.
On a $900,000 Ontario home with 10% down ($90,000), the insured mortgage of $810,000 carries a CMHC premium of approximately $28,350, bringing your starting balance to $838,350.
Ontario Mortgage: Sample Numbers
| Home Price | Down Payment (20%) | Mortgage Amount | Monthly Payment (6.25%, 25yr) |
|---|---|---|---|
| $700,000 | $140,000 | $560,000 | $3,739 |
| $900,000 | $180,000 | $720,000 | $4,807 |
| $1,200,000 | $240,000 | $960,000 | $6,409 |
| $1,500,000 | $300,000 | $1,200,000 | $8,011 |
Ontario Land Transfer Tax
Ontario charges a provincial land transfer tax on all home purchases. Toronto buyers pay an additional municipal land transfer tax on top of the provincial amount. These are one-time costs due at closing and don't affect your mortgage payment — but they significantly add to your upfront costs.
- Provincial LTT: Ranges from 0.5% to 2.5% of the purchase price, with higher rates on amounts above $2 million
- Toronto Municipal LTT: An equivalent additional tax for Toronto properties
- First-time buyer rebate: Ontario and Toronto both offer rebates for first-time buyers (up to $4,000 provincial, up to $4,475 Toronto)
Extra Payments Matter More on Larger Ontario Mortgages
Because Ontario mortgage balances tend to be large, the impact of extra payments is amplified. An extra $500/month on a $900,000 mortgage at 6.25% saves approximately $195,000 in interest over the life of the loan and shortens the amortization by over 7 years.
Use our Extra Payment Calculator to model your specific Ontario mortgage and see exactly how much you can save.
Should Ontario Homeowners Refinance?
With larger loan balances, Ontario homeowners benefit more from even small rate reductions. A 0.5% rate drop on a $800,000 mortgage saves about $4,000/year — making the break-even on typical $8,000–$12,000 closing costs just 2–3 years.
Use our Refinance Break-Even Calculator to run the numbers before speaking with a lender.
Ontario Property Taxes
Ontario property tax rates vary widely by municipality. Toronto's residential rate is among the lowest in the province — roughly 0.6–0.7% of assessed value — thanks to its large tax base, while many surrounding regions including Ottawa and Hamilton run notably higher, sometimes 1–1.5%. That gap can meaningfully change your all-in monthly housing cost even between two similarly priced homes in different Ontario cities.
First-Time Buyer Programs Available to Ontarians
Beyond the provincial and Toronto municipal land transfer tax rebates described above, Ontario buyers can combine several federal incentives: the First Home Savings Account (FHSA, up to $8,000/year tax-free toward a down payment), the Home Buyers' Plan (RRSP withdrawal up to $60,000), and the GST/HST New Housing Rebate on new-construction and pre-construction condos — common in the GTA market.