5 Tips to Get the Best Mortgage Rate in Toronto

Published February 10, 2026 • 6 min read • By Mortgage Wave Team

In Toronto's expensive real estate market, even a small difference in your mortgage rate can save you tens of thousands of dollars over the life of your mortgage. A 0.25% rate reduction on an $800,000 mortgage saves you approximately $5,000 per year — that's $25,000 over a 5-year term. Here are five proven strategies to ensure you're getting the absolute best rate available.

Tip #1: Use a Mortgage Broker (Not Just Your Bank)

This is the single most impactful thing you can do. When you walk into a bank, you get one option — their products, their rates. When you work with a mortgage broker, you get access to 50+ lenders, including the big banks, credit unions, trust companies, and monoline lenders who often offer the most competitive rates.

Monoline lenders (lenders that only do mortgages) are a secret weapon. Because they don't have branch networks or offer chequing accounts, their overhead is lower — and they pass those savings on through lower rates. You can't access these lenders directly; you can only get their rates through a broker.

The best part? Using a mortgage broker is free for most borrowers. We're compensated by the lender you choose, so you get expert advice and access to 50+ lenders at no cost. There's literally no downside.

Tip #2: Optimize Your Credit Score Before Applying

Your credit score is the single biggest factor (besides income) that determines what rate you qualify for. Here's how lenders typically tier their rates:

Credit Score Range	Rate Impact
760+	Best available rates
720-759	Excellent rates (minor premium)
680-719	Good rates (slight premium)
650-679	Above-average rates (noticeable premium)
Below 650	Limited options, higher rates, or alternative lenders

Quick wins to boost your score before applying:

• Pay down credit card balances — Keep utilization below 30% of your limit (below 10% is ideal)
• Don't close old accounts — Length of credit history matters
• Don't open new accounts — Each application creates a hard inquiry
• Fix errors on your credit report — Check Equifax and TransUnion for mistakes
• Set up automatic payments — Payment history is the #1 factor in your score

Start working on your credit score at least 3-6 months before you plan to apply for a mortgage. Small improvements can make a big difference in the rate you receive.

Tip #3: Consider Your Mortgage Features Carefully

The lowest rate isn't always the best deal. Some ultra-low rates come with restrictive conditions that could cost you more in the long run:

• Prepayment privileges — Can you make lump-sum payments or increase your regular payment? If a low-rate mortgage limits prepayments to 10% annually vs. 20%, that flexibility could be worth more than a 0.05% rate difference
• Portability — Can you transfer your mortgage to a new property if you move? Without portability, you'll face a penalty to break your mortgage
• Penalty calculation — How does the lender calculate prepayment penalties? Some lenders use the posted rate for IRD calculations, resulting in much higher penalties
• Blend-and-extend — Can you refinance mid-term by blending your current rate with a new rate? This feature can save thousands if you need to access equity

A mortgage at 3.84% with generous features could save you more than a mortgage at 3.74% with restrictive terms — especially if your plans change during the term.

Tip #4: Time Your Rate Lock Strategically

In Canada, you can typically lock in a mortgage rate 120 days before closing through a pre-approval or rate hold. This protects you from rate increases while you shop for your home.

Here's the strategic advantage: if rates go down after you lock in, most brokers can get you the lower rate. But if rates go up, you're protected at your locked rate. It's a one-way bet in your favour.

Timing tips:

• Get pre-approved as early as possible (120 days out) to maximize your rate hold window
• If rates are dropping, wait a few weeks before locking — but don't try to time the absolute bottom
• Watch Bank of Canada announcement dates — rates often shift after these
• Fixed rates follow bond yields; variable rates follow the Bank of Canada — track accordingly

Tip #5: Put at Least 20% Down (If You Can)

While this isn't possible for everyone, a 20% down payment gives you two rate advantages:

1. No CMHC insurance — You avoid the 2.8%-4.0% insurance premium, saving thousands
2. More lender options — Some lenders with the most competitive rates only work with conventional (20%+ down) mortgages

That said, don't delay your purchase for years just to reach 20%. In a rising market, the appreciation you miss out on could exceed the insurance premium. Read our down payment guide for a detailed analysis.

Bonus Tip: Negotiate (Or Let Us Negotiate for You)

Many people don't realize that mortgage rates are negotiable. Banks and lenders have discretion to offer better rates to qualified borrowers. Having competing offers from multiple lenders gives you powerful leverage.

This is where a mortgage broker really shines. We negotiate with lenders on your behalf every day. We know which lenders are hungry for business, which ones have the best rates for your specific profile, and how to structure your application to get the best result.

Ready to Get Your Best Rate?

At Mortgage Wave, finding you the best mortgage rate isn't just what we do — it's all we do. We compare 50+ lenders, negotiate on your behalf, and ensure you're getting a mortgage that fits both your rate expectations and your life plans.