Ontario mortgage guide: CMHC, land transfer tax, costs
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By Editorial team
A Toronto buyer purchasing at $900,000 with 20% down at 5.20% fixed faces about $4,895/month all-in for P&I, property tax at a 0.6% mill rate, and home insurance. An Ottawa buyer at $650,000 with 10% down and CMHC insurance lands at $4,294/month despite a smaller purchase price, because the insured loan carries a $18,135 premium rolled into the balance. Combined Toronto land transfer tax on a repeat buyer adds $28,950 in cash at closing. This guide is for Ontario buyers who want a mortgage calculator Ontario search to translate into real provincial rules, not just a payment line.
The scenario modeled
Both tabs use 5.20% fixed over 25 years with a 5-year term. Property taxes are modeled as 0.6% of value in Toronto ($450/month) and 1.0% in Ottawa ($542/month). Home insurance is $175/month in each city. Land transfer tax is shown separately because it is due at closing, not in the monthly mortgage payment.
| Ontario land transfer tax tiers (provincial and Toronto municipal) | |
|---|---|
| $0 to $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| Above $400,000 | 2.0% |
| Input | Toronto $900k, 20% down | Ottawa $650k, 10% down |
|---|---|---|
| Purchase price | $900,000 | $650,000 |
| Down payment | $180,000 (20%) | $65,000 (10%) |
| Base loan before CMHC | $720,000 | $585,000 |
| CMHC premium | None | $18,135 (3.10%) |
| Total mortgage balance | $720,000 | $603,135 |
| Interest rate | 5.20% fixed | 5.20% fixed |
| Property tax (modeled) | $450/mo (0.6%) | $542/mo (1.0%) |
| Home insurance | $175/mo | $175/mo |
| Amortization | 25 years | 25 years |
| Term | 5 years | 5 years |
The findings
Toronto's conventional path carries a higher loan balance but skips CMHC entirely. Monthly P&I is $4,270 versus $3,577 in Ottawa, a gap of $693/month on principal and interest alone. After taxes and insurance, the all-in gap narrows to $601/month because Ottawa's higher mill rate offsets part of the CMHC premium effect.
Closing-day land transfer tax is where Toronto punishes repeat buyers. Provincial tax on $900,000 is $14,475; municipal tax matches it for $28,950 combined. A qualifying first-time Toronto buyer after rebates pays about $20,475 instead. Ottawa buyers outside Toronto pay provincial tax only: $9,475 gross, or $5,475 after the $4,000 first-time rebate. The Ottawa insured path also needs $1,451 in provincial sales tax on the CMHC premium at closing.
At the federal stress test, both scenarios are qualified at 7.20% (contract 5.20% plus 2.00%), not the payment rate you actually pay. That gap shrinks buying power in every Ontario market, but it bites hardest where prices cluster near Toronto's $900,000 average or Ottawa's $650,000. Mid-size markets like Hamilton (~$700,000) and Kitchener-Waterloo (~$550,000) follow the same provincial tiers with no second municipal tax unless you buy inside Toronto.
| Toronto $900k, 20% down | Ottawa $650k, 10% down | Difference | |
|---|---|---|---|
| Monthly P&I | $4,270 | $3,577 | $693/month more in Toronto |
| All-in monthly (P&I + tax + insurance) | $4,895 | $4,294 | $601/month more in Toronto |
| Interest over 5-year term | $175,434 | $146,958 | $28,476 |
| Total interest (25 years) | $560,972 | $469,919 | $91,053 |
| Land transfer tax (repeat buyer) | $28,950 | $9,475 | $19,475 |
For CMHC tier math and how premiums scale at 5%, 10%, and 15% down, see our CMHC insurance guide. For a full Toronto closing budget with legal fees and adjustments, see the land transfer tax guide.
Canadian context
Ontario land transfer tax applies on every resale purchase in the province, and Toronto is the only Ontario municipality that adds a second municipal tax on the same price tiers. Federal rules still cap CMHC insurance to purchases below $1,000,000 with less than 20% down, and the OSFI stress test applies at federally regulated lenders regardless of city. Average resale prices in the Greater Toronto Area and Ottawa diverge by hundreds of thousands of dollars, but the provincial tax brackets and CMHC tiers are the same province-wide.
Source: Government of Ontario, "Calculating Land Transfer Tax," accessed June 2026. URL: https://www.ontario.ca/document/land-transfer-tax/calculating-land-transfer-tax
When this applies - and when it doesn't
This guide applies when: You are buying in Ontario and need to combine mortgage payment math with provincial land transfer tax, CMHC tiers, and a realistic property tax estimate. You are comparing Toronto (double LTT) with a city like Ottawa or Hamilton (provincial LTT only) at different down payment levels.
It does not apply when: Your purchase is $1,000,000 or above, where 20% down is mandatory and CMHC insurance is unavailable. New-construction homes in Ontario may charge HST with partial rebates that this article does not model. If your main question is how lenders calculate GDS and TDS at the stress-tested rate, use our stress test guide and the broader Guides hub for qualification-focused articles.
Remember: Land transfer tax rebates require first-time buyer status and differ between provincial and Toronto municipal programs. CMHC premiums are capitalized into the loan; Ontario PST on the premium is cash at closing. Neither appears in the monthly P&I line unless you add property tax and insurance in the calculator.
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Frequently asked questions
- How is land transfer tax calculated in Ontario?
- Ontario charges graduated tax on the full purchase price: 0.5% on the first $55,000, 1.0% on $55,001 to $250,000, 1.5% on $250,001 to $400,000, and 2.0% above $400,000. On a $900,000 Toronto purchase, provincial land transfer tax before rebates is $14,475. Toronto buyers pay the same tiers again as municipal land transfer tax, doubling the bill inside city limits.
- Do Toronto buyers pay land transfer tax twice?
- Yes. Toronto charges municipal land transfer tax on top of the provincial amount, using identical rate tiers. On a $900,000 purchase, gross combined land transfer tax is $28,950 before rebates. First-time buyers who qualify can claim up to $4,000 off the provincial portion and up to $4,475 off the municipal portion, reducing the combined bill to $20,475 on that price.
- What CMHC premium applies on a $650,000 Ontario purchase with 10% down?
- With $65,000 down on a $650,000 home, the base loan is $585,000. At the 10% down tier, CMHC charges a 3.10% premium, or $18,135, which is added to the mortgage balance rather than paid in cash at closing. Ontario also charges 8% provincial sales tax on the premium itself, about $1,451 due at closing.
- How does the mortgage stress test affect Ontario affordability?
- Lenders qualify you at the higher of 5.25% or your contract rate plus 2.00%. At a 5.20% contract rate, the qualifying rate is 7.20%. That higher rate reduces maximum borrowing by roughly 15-20% compared with qualifying at the contract rate alone, which matters most in Toronto and Ottawa where average prices sit near $900,000 and $650,000.
- What should I enter in a mortgage calculator Ontario buyers use?
- Enter the purchase price, down payment dollars or percentage, contract rate, amortization, and province. Turn on CMHC when your down payment is below 20% on an eligible purchase under $1,000,000. Add property tax and home insurance if you want all-in monthly costs. Land transfer tax is a closing-day cash cost and is not part of the loan payment unless you separately model it.