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Average home prices in Ontario
If you are looking to purchase a home in Ontario and are trying to figure out how much you can afford – check out these average home prices which can be used in your mortgage payment calculations to understand if you can afford the mortgage costs.
Ontario homes had an average sale price of $821,624 in January 2024 which is an annual increase of 2.9% over the average sale price of $798,190 in January 2023. Ontario’s MLS benchmark price for January 2024 was $849,000 which is a more accurate way to track the typical home price trends in Ontario.
- Ottawa had an average home sale price of $621,600 in January 2024 – this is a year-over-year increase of 3.20% from the average price of $602,500 in January 2023. The MLS benchmark price for the typical Ottawa home was $621,600 in January 2024.
- Toronto’s average home price was $1,065,800 in January 2024 – for a year-over-year decrease of -0.40% from $1,070,600 in January 2023. The MLS benchmark price for the typical Toronto home in January 2024 was $1,065,800.
Ontario land transfer tax
Land transfer tax (LTT) is an additional closing cost associated with the purchase of a house or condo in Ontario which is paid by the buyer when they take possession of the property. The purpose of this tax is to help fund essential services to support Ontario communities – such as education, healthcare, and infrastructure projects.
The calculation of provincial land transfer tax in Ontario is based on the property's estimated value – with increasing rates for more expensive houses similar to home income tax brackets work in Ontario. If you are purchasing a home in Toronto, a municipal land transfer tax will also be applied in addition to the Ontario provincial land transfer tax.
Ontario’s provincial land transfer tax (LTT) rates:
- Amounts up to and including $55,000: 0.5%
- Amounts exceeding $55,000, up to and including $250,000: 1.0%
- Amounts exceeding $250,000, up to and including $400,000: 1.5%
- Amounts exceeding $400,000: 2.0%
- Amounts exceeding $2,000,000, where the land contains one or two single-family residences: 2.5%
Toronto’s municipal land transfer tax (MLTT) rates:
- Up to and including $55,000: 0.5%
- $55,000.01 to $250,000: 1.0%
- $250,000.01 to $400,000: 1.5%
- $400,000 to $2,000,000: 2.0%
- Over $2,000,000: 2.5%
- Over $3,000,000 and up to $4,000,000: 3.5%
- Over $4,000,000 and up to $5,000,000: 4.5%
- Over $5,000,000 and up to $10,000,000: 5.5%
- Over $10,000,000 and up to $20,000,000: 6.5%
- Over $20,000,000: 7.5%
Ontario Land transfer tax rebate
If you are a first-time homebuyer in Ontario, you may be eligible for a provincial land transfer tax rebate. Since municipal land transfer tax is paid in Toronto – there is a separate rebate that can be claimed for the purchase of a home in Toronto. The maximum provincial LTT rebate is $4,000 which would be the land transfer tax on a house valued at $368,000. The maximum MLTT in Toronto is $4,475 which would be the land transfer tax on a home valued at $400,000. For both the provincial and municipal (if your house was purchased in Toronto) land transfer rebates, the following criteria must be met:
- You are a Canadian citizen or a permanent resident of Canada
- You must be at least 18 years old
- You must occupy the house as your principal residence within nine months of the transfer date
- You have not owned a home anywhere in the world at any time (If you have a spouse, this rule also applies to them).
Mortgage default insurance
Mortgage default insurance is an extra cost associated with purchasing a home in Ontario. However, this cost can be avoided if you can meet specified downpayment regulations. Mortgage default insurance must be purchased when the downpayment is between 5% and 20% of the value of the house.
Mortgage default insurance is added to your mortgage balance which will be paid off over the amortization of your mortgage. However, any Ontario provincial sales tax (PST) on the mortgage default insurance will be required to be paid in cash when the purchase of the house closes.
In Ontario, the minimum downpayment is 5% on a house that is valued up to $500,000. When the price of a home increases beyond $500,000, a minimum downpayment of 10% is needed up to a house value of $1,000,000. For homes that are valued over $1,000,000 the minimum down payment is 20% of the total purchase price.
How much house can I afford?
When looking to secure a mortgage for the purchase of a home, mortgage lenders use two ratios to determine how much house (or the total mortgage) you can afford. The first ratio is the Gross Debt Service (GDS) ratio which looks at the percentage of your monthly household income compared to housing costs. For a house to be considered affordable, your GDS ratio should not exceed 39%. The second ratio used is the Total Debt Service (TDS) ratio which is a percentage of your household income compared to housing costs as well as any other debts. For a house to be considered affordable, your Total Debt Service ratio should not exceed 44%.
- Gross debt service (GDS) ratio = (Total housing costs) / (Gross Annual Income)
- Total debt service (TDS) ratio = (Total housing costs + Other debt costs) / (Gross Annual Income)
Legal Disclaimer
This calculation is for illustrative purposes only and should not be relied upon as specific financial advice. You should speak with a professional before making any final decisions to ensure that your financial needs have been properly taken into account.