Here are some mortgage options and strategies that home buyers in Ontario commonly consider. (This is general information — for exact rates and advice tailored to you, it’s best to talk with a mortgage specialist or broker.)
Types of Mortgages
1. Fixed-Rate Mortgage
- Rate stays the same for the entire term (e.g., 1, 3, 5 years).
- Predictable monthly payments — good if you prefer stability.
- Often slightly higher initial rates than variable options.
Best for: Buyers who want certainty in budgeting and protection against rising interest rates.
2. Variable-Rate Mortgage
- Interest rate can go up or down with the market.
- Usually starts with a lower rate than fixed.
- Your monthly payments can fluctuate.
Best for: Buyers who can handle some payment variability and want potentially lower rates.
3. Hybrid / Convertible Mortgages
- Combines fixed and variable portions.
- Gives flexibility — sometimes you can “convert” part to fixed later.
Best for: Buyers seeking a middle ground between stability and lower initial cost.
Down Payment Options
- Minimum 5% down for homes up to $500,000.
- For homes over $500,000, minimum 5% on first $500K + 10% on portion above.
- If you put less than 20% down, you need mortgage default insurance (CMHC/Genworth/Canada Guaranty).
Programs & Incentives for Ontario Buyers
First-Time Home Buyer Incentive (Federal)
A shared-equity mortgage with the government up to 5–10% of the home price for a lower monthly mortgage cost.
Home Buyers’ Plan (HBP)
Withdraw up to $35,000 from your RRSP to put toward your first home.
Land Transfer Tax Rebates
- In Ontario, first-time buyers may qualify for a provincial land transfer tax refund (up to certain limits).
- If buying in Toronto, there’s also a Toronto land transfer tax rebate.
Mortgage Features to Think About
Pre-payment Options
Allows extra payments toward your mortgage without penalties (up to a limit). Helpful for paying down principal faster.
Portability
If you move before your mortgage term ends, a portable mortgage lets you transfer your rate to a new home.
Payment Frequency
- Weekly / Bi-weekly / Monthly
- Bi-weekly accelerated payments often help you pay down faster.
Choosing a Mortgage: Questions to Ask
✔ What’s the interest rate (and how often can it change)?
✔ What’s the penalty for breaking the mortgage early?
✔ Can I make extra payments without fees?
✔ Is the mortgage open, closed, fixed, or variable?
✔ Do I qualify for government incentives or rebates?
Why Talk to a Mortgage Broker
A mortgage broker can:
- Compare multiple lenders
- Find competitive rates (including some not advertised publicly)
• • Explain specific Ontario/Canada programs you qualify for
Home is where the Heart is... 