Lower payments, pulling out equity, and switching terms are all about making your mortgage work better for the life you’re actually living. And right now, mortgage refinancing rates in Ontario are shifting just enough to make the question worth asking.
The headlines won’t tell you much, and most “trends” read like filler. But if you’re paying attention to real refinance mortgage trends in 2025, there’s movement—and opportunity. The key is knowing which options matter, and which look good on paper.
Let’s break it down clearly.
Current Refinance Rates and Where They Stand
Rates have settled for now. The current mortgage refinance rates in Canada are holding steady, sitting slightly below last year’s levels. That change isn’t headline-worthy, but it does create room to make a move if the math checks out.
In Ontario, here’s where things stand as of late June 2025:
- A 5-year fixed refinance rate in Ontario is averaging around 3.84%, with some lenders quietly going lower for well-qualified borrowers.
- The variable refinance mortgage rate in Ontario is coming in at 3.95%, give or take, depending on the lender and structure.
Understanding what those rates mean in the context of your term, your penalties, and your next five years is essential.
What’s Moving Refinance Rates in 2025
Mortgage rates don’t shift on a whim. There’s a pattern behind the numbers. Some of it is predictable, some of it is not. If you’re trying to make sense of refinance mortgage trends in 2025, it helps to know which levers are actually being pulled.
Here’s what’s shaping the rate landscape in Ontario right now:
Bank of Canada policy
The Bank of Canada rate forecast still drives the biggest moves. The overnight rate has held at 4.95% through mid-2025, but projections point to a gradual drop—possibly hitting 2.5% by 2026, depending on how inflation plays out. That matters most for variable-rate borrowers, but don’t expect lenders to mirror BoC cuts dollar-for-dollar. They tend to move slower and hedge more.
Bond Markets and Lender Positioning
Fixed-rate mortgages are tied to 5-year Government of Canada bond yields. Those yields have dipped through 2025, helping pull down the 5-year fixed refinance rate in Ontario. But lenders will also push promotional offers to stay competitive, while others price more conservatively based on funding costs and risk appetite.
Inflation, Employment, and Household Debt
Any unexpected spike could slow or stall forecasted cuts. Meanwhile, high household debt levels and stable employment numbers are keeping lenders cautious. That’s part of why mortgage refinancing rates in Ontario aren’t falling as fast as the BoC rate might suggest on paper.
Fixed or Variable: What’s the Smarter Move in 2025?
Choosing between a fixed or variable rate is one of the most important decisions you’ll make when refinancing.
Let’s look at where things stand:
Fixed Rates
Opting for a 5-year fixed refinance gives you predictability. You lock in your rate—often around 3.84%—and your payments stay the same over the term. That stability can be helpful if you’re budgeting long term, or if you’re concerned about the timing of potential Bank of Canada cuts.
Fixed rates tend to be a good fit for people who plan to stay in their home for several years or simply want peace of mind knowing their rate won’t change, no matter what the market does.
Variable Rates
On the other side, variable refinance mortgages are priced around 3.95% and are influenced directly by changes to the prime rate. If the BoC rate forecast proves accurate and the central bank starts cutting rates later this year, variable-rate borrowers could benefit from lower payments down the line.
That said, variable rates come with more risk. If economic data shifts or inflation ticks up unexpectedly, the BoC could pause or reverse course. So if you’re leaning toward variable, make sure you’re financially comfortable with some fluctuation.
Other Options
Some homeowners are also considering shorter-term fixed products, like 1- or 2-year terms, as a way to ride out this transitional period while staying flexible. These may offer slightly higher rates today but allow you to reset sooner if rates continue trending down.
Why Work With a Mortgage Broker?
A mortgage broker Ontario refinance expert can simplify the refinancing process and potentially save you money. Here’s how they help:
- Rate access across multiple lenders: Brokers compare rates from banks, credit unions, and non-bank lenders to find the best refinance rates.
- Customized advice: They assess your financial goals—whether you want to lower monthly payments, shorten your term, or refinance with home equity in Ontario and recommend the right fit.
- Paperwork and negotiation support: Brokers handle the application process and can sometimes negotiate better terms or waive certain fees.
- Unbiased guidance: Since they’re not tied to one lender, they focus on what’s best for you, not just what the bank offers.
Do Your Refinancing Right With The Mortgage Centre
You can Google rates for hours. You can talk to your bank, which will tell you they have the best offer. You can read articles that say the same five things in slightly different fonts. Or you can sit down with someone who’s done this a thousand times before—and still treats your situation like it’s the only one on the table.
At The Mortgage Centre, we ask better questions. Do you actually benefit from refinancing—or is your penalty going to wipe out the gains? Are you planning to move in two years? Is your lender holding back a better offer and hoping you won’t push for it?
We know the lenders, we see the trends, and we’ll tell you what’s happening behind the polished rates on the websites. If there’s a smarter move, we’ll find it. If it’s not worth it, we’ll say so. If you are tired of generic advice and are looking for straight answers, we’re here to show you what refinancing would actually look like for your mortgage.
