Buying a house in Toronto in November 2026: what higher rates and a slower market mean for you
TL;DR: The monthly payment, not the asking price, is the number to plan around when buying a house in Toronto this fall. Buyers have more room to negotiate than a year ago, but borrowing costs more than it did a month ago, so both sides of the deal are moving. A mortgage pre-approval with a rate hold gives you a fixed set of numbers to shop with. First-time buyers can also recover a meaningful part of their land transfer tax, and that rebate belongs in the budget from the start. A broker can show you how these pieces fit your own income and down payment.
Where the Toronto market stands
Prices in the Greater Toronto Area are lower than a year ago, and buyers have had more negotiating power over the past year. The Toronto Regional Real Estate Board (TRREB) reported these October 2026 figures on November 4 (TRREB):
| October 2026 | Result | Change from October 2025 |
|---|---|---|
| Home sales | 5,603 | Down 7.9% |
| New listings | 14,173 | Down 11.9% |
| Average selling price | $1,024,108 | Down 2.7% |
| MLS Home Price Index composite | Typical-home benchmark | Down 4.3% |
The MLS Home Price Index tracks the price of a “typical” home rather than the average sale, which CREA notes can change a lot from one month to the next (CREA). On a month-over-month basis, seasonally adjusted sales and new listings rose from September, and the average price edged up slightly (TRREB).
TRREB’s chief information officer, Jason Mercer, said that “GTA homebuyers continued to benefit from substantial negotiating power on price over the past year” (TRREB). For anyone buying a house in Toronto, that shows up in practical ways: more time to decide, more room on price, and more flexibility on conditions and closing dates.
What the October 28 rate increase changes for buyers
The Bank of Canada raised its policy rate by 0.25 percentage points to 2.50% on October 28, 2026, and the major banks lifted prime from 4.45% to 4.70% the next day (Bank of Canada, MPA). Inflation has held near 3% since April, and the Bank expects it to reach about 3.5% by the end of the year, with housing likely to remain relatively weak. It also warned that “there could be a need to increase the policy rate further,” with its next decision on December 9.
How much this affects you depends on the type of mortgage you choose:
| Mortgage type | Effect of the October increase |
|---|---|
| Variable rate, payment adjusts with prime | The payment rises right away. Each 0.25-point increase adds about $13 a month for every $100,000 owed with 25 years left, which is about $66 on a $500,000 balance at a variable rate near 3.5%. |
| Fixed rate | The rate is locked for your term. Banks typically use the Government of Canada bond yield as the benchmark for pricing fixed rates, not the Bank’s policy rate directly (TD). The five-year yield was about 3.7% at the end of September (C.D. Howe Institute). |
The payment change is our own calculation, using semi-annual compounding, a 25-year amortization and a starting variable rate of 3.45%. Buyers are not the only ones adjusting. The Bank of Canada projected in July 2025 that about one-third of all mortgage holders would see higher payments by the end of 2026, and about 60% of those renewing in 2025 and 2026 (Bank of Canada). That projection came before this year’s increase. C.D. Howe points out that mortgages signed in 2020 and 2021, when five-year yields were below 1%, are now renewing with yields near 3.7%. If your own mortgage is coming up for renewal, our guide to mortgage renewal vs refinance in Ontario explains your options.
For a buyer, the takeaway is simple: a quarter-point change moves a payment by tens of dollars on a mid-sized mortgage, and by more as the balance grows. It is a real cost, and it is easier to manage when you know your numbers early.
What mortgage pre-approval does in a rising-rate market
A mortgage pre-approval is a lender’s early check of your finances that holds an interest rate for a set period, which matters most when rates are moving. Prequalifying for a mortgage and getting pre-approved are different steps (ATB):
| Prequalification | Pre-approval | |
|---|---|---|
| What it is | An early estimate. The lender does not check your credit or verify your finances. | A more formal step. The lender does initial checks and offers a set rate if you are fully approved within a set period. |
| Rate hold | No | Yes, commonly 90 to 120 days depending on the lender |
| Best used for | Getting a rough price range | Shopping with a rate in place |
When you prequalify for a mortgage, nobody has verified your numbers yet, so treat the result as a starting range. A full mortgage pre approval is built on your documents, so it gives you a firmer picture of what you can borrow.
The rate hold is the part that matters in this market. A mortgage rate hold means that if rates rise while you search, the rate you were offered stays available for the length of the hold (ATB). Ask your lender whether you can take a lower rate if rates fall before you close. The hold also has limits. Pre-approval is not a guarantee that a lender will fund your loan: final approval depends on conditions such as an appraisal of the property, validation of your down payment and a title report (ATB), and is subject to lender and insurer criteria.
A pre-approval also tells you your qualifying rate. Lenders test your file at the higher of 5.25% or your contract rate plus two percentage points (OSFI), so your borrowing limit is based on a rate above the one you will pay. Our guide to how much home loan you can afford in Toronto walks through that math.
If you are buying a house in Toronto and ready to see your range, you can talk to a broker about a pre-approval that fits your income and down payment.
Plan around the monthly payment, not the price
Buying a house in Toronto works best when you start with the monthly payment you are comfortable carrying, then work backward to a price. A purchase price can look manageable at today’s rate and feel different if your budget has little room, so it helps to test the payment at a rate a quarter point higher, and at the qualifying rate your lender uses.
A couple buying a $900,000 townhouse in Toronto’s east end put down $180,000, which is 20%, and borrowed $720,000 over a 25-year amortization. One of them runs a small design studio, so their pre-approval started with her business paperwork. Here is how the payment looked at illustrative rates seen on November 4, 2026 (your own rate will depend on your file):
| Scenario | Monthly payment |
|---|---|
| Five-year fixed at 4.54% | About $4,001 |
| Variable at 3.69% | About $3,667 |
| Fixed offer rises to 4.79% before they lock in | About $4,102 |
With the rate hold from their pre-approval, the third row did not apply to them. The $334 gap between fixed and variable buys a payment that stays the same for five years, while the variable payment moves with prime. Payments are our own calculation, using semi-annual compounding over 25 years, and rates are subject to change. You can run your own figures with our mortgage payment calculator and affordability calculator, and talk to a broker for the rate that fits your own file, since rates vary a lot with income, down payment and property.
Land transfer tax and the first-time buyer rebates in Toronto
When buying a house in Toronto, you pay two land transfer taxes, one to the province and one to the city, and first-time buyers can claim a rebate on each. On a $900,000 purchase, the Ontario tax is $14,475 (Province of Ontario). Toronto’s rates match the province’s up to $2 million, so the city tax is also $14,475 (City of Toronto). That brings the total to $28,950 before rebates.
| Item | Amount on a $900,000 home |
|---|---|
| Ontario land transfer tax | $14,475 |
| Toronto municipal land transfer tax | $14,475 |
| Maximum Ontario first-time buyer refund | Up to $4,000 (Province of Ontario) |
| Maximum Toronto first-time buyer rebate | Up to $4,475 (City of Toronto, TRREB) |
| Total after both rebates | $20,475 |
The first time home buyer rebate in Ontario has a few conditions, and the Toronto rebate follows similar ones. You must be at least 18, be a Canadian citizen or permanent resident, move in as your principal residence within nine months, and never have owned a home anywhere in the world. If you have a spouse, they must not have owned one while married to or living with you. Claims are due within 18 months of closing. If a co-buyer is not a first-time buyer, the refund is reduced in proportion (Province of Ontario).
If you are a first time home buyer in Ontario, the First Home Savings Account can also help with the down payment. You can contribute up to $8,000 a year, with unused room carrying forward, to a lifetime limit of $40,000 (Canada Revenue Agency).
What to do as a buyer right now
Buying a house in Toronto this fall goes more smoothly when you do a few things in a sensible order:
- Get pre-approved before you shop. Ask how long the rate hold lasts and what happens if rates fall during that time.
- Set a payment ceiling. Decide the monthly amount you want to stay under, then work out the price range from there.
- Test your numbers at a higher rate. Look at the payment at a quarter point above your offered rate, not only at today’s rate.
- Compare fixed and variable using your own balance. The right answer depends on how much payment variability you can absorb.
- Budget the full closing costs. Include land transfer tax after rebates, legal fees and moving costs, and keep records of where your down payment came from.
- Use your negotiating room. TRREB reports that buyers have had substantial negotiating power on price over the past year, so there may be flexibility on price, conditions and closing dates. Your realtor can advise on what is realistic for a given home.
If you would like a second set of eyes on your numbers before you make an offer, talk to a broker at MonsterMortgage.ca.
When your income does not fit the standard mold
Business owners, people who recently changed jobs and buyers living on pension income can still buy, but the lender you choose matters more. Business owners are usually asked for more paperwork, such as a Notice of Assessment with the T1 General and a statement of business activities (CMHC). Because each lender weighs that paperwork differently, the lender you choose changes the outcome. MonsterMortgage.ca works with a network of 30+ lenders, including banks, credit unions and alternative lenders, and has more than 25 years of experience with files that need a closer look. A conversation before you start house hunting lets us match your situation to the lender that suits it.
FAQ
Is it a good time to buy a house?
It depends on your situation, because the market and your finances both matter. On the market side, GTA prices are lower than a year ago and buyers have had more negotiating power, while borrowing costs rose on October 28 and the Bank of Canada said there could be a need to increase its rate further. Nobody can reliably predict the bottom of a market or the next rate move. A more useful question is whether you have stable income, a down payment you are comfortable with, and a monthly payment that still works at a somewhat higher rate. If the answer is yes, a pre-approval is a practical way to see your numbers.
What is the difference between mortgage pre-approval and prequalification?
Prequalification is an early estimate, and the lender does not check your credit or verify your finances. Pre-approval is a more formal step, where the lender does initial checks and offers a set rate if you are fully approved within a set period. Neither is a final approval, which still depends on the property and on lender and insurer criteria.
How long does a mortgage rate hold last?
A rate hold commonly lasts 90 to 120 days, depending on the lender (ATB). If you are still searching when it is close to expiring, ask your broker what your options are. Also ask your lender whether you can take a lower rate if rates fall before closing.
Do first-time buyers get a land transfer tax rebate in Toronto?
Yes. Eligible first-time buyers can claim up to $4,000 from Ontario and up to $4,475 from the City of Toronto, which together can reduce the tax by up to $8,475. You must meet the eligibility conditions, including never having owned a home anywhere in the world, and claims are due within 18 months of closing.
Does the October rate increase change my fixed-rate offer?
Not directly. Banks typically price fixed rates off government bond yields rather than the Bank of Canada’s policy rate, so fixed rates can move independently of it. The October increase affects variable-rate mortgages and lines of credit tied to prime right away.
If you are buying a house in Toronto and want to understand where you stand, talk to a broker about your goals, your income and your timeline. Rates and figures are accurate as of publish date and subject to change without notice. This article is for informational purposes only and does not constitute financial, legal or investment advice.
