TD, Canada’s second-largest bank, shines with flexible payment features. Its posted rates are negotiable, and the bank distinguishes itself through options like 100% payment increases, 15% annual prepayment allowances, and a four-month “payment vacation.”
TD’s mortgage lineup, while more basic, includes fixed and variable rate options, the Home Equity FlexLine, and specialized products for newcomers and cross-border buyers.
This review analyzes TD’s mortgage offerings, detailing core products, specialized options, and unique features like payment vacations. We’ll explore TD’s application process, prepayment terms, and renewal options. The guide also compares TD’s mortgage products against significant competitors, providing critical insights for potential borrowers.
For those considering a TD mortgage, refinancing, or approaching renewal, this comprehensive overview will equip you with the information to make an informed decision about one of Canada’s leading mortgage lenders.
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TD Mortgage Rates
| Fixed mortgage rates (uninsured) | Fixed mortgage rates (insured) | Variable mortgage rate | |
|---|---|---|---|
| 1-Year | 6.09% | ||
| 2-Years | 5.39% | ||
| 3-Years | 4.59% | ||
| 4-Years | 5.99% | ||
| 5-Years | 4.54% | 4.54% | 4.89% |
| 10-Years | 6.80% |
TD’s prime rate is currently 4.95%, while its Mortgage Prime Rate stands at 5.10%, reflecting the most recent adjustment on March 12 2025. TD uniquely maintains a separate prime rate specifically for mortgages, typically set 0.15% above the bank’s main prime rate. These Prime Rates are the foundation for TD’s banking products and usually move with the Bank of Canada’s overnight rate adjustments, but sometimes don’t follow suit.
Like other major banks, TD advertises posted rates that serve as starting points for negotiation. While TD’s posted rates may appear higher than those of some competitors, their willingness to offer competitive rates to qualified borrowers, combined with their flexible payment features, makes them a strong option for those prepared to negotiate. TD also maintains limited-time “Special Mortgage Rates,” which are lower than their posted rates.
TD overview
Founded in 1855 as The Bank of Toronto by a group of millers and merchants, TD merged with The Dominion Bank in 1955 to form the Toronto-Dominion Bank.
Through strategic acquisitions, including Canada Trust in 2000 and significant U.S. expansions with Banknorth and Commerce Bancorp, the bank evolved from serving local businesses to becoming one of North America’s largest financial institutions.
Today, TD is Canada’s second-largest bank by total assets and serves approximately 22 million customers.
While TD’s mortgage rates typically align with those of other major banks, they distinguish themselves through flexible payment features, including increasing payments by up to 100% during the term and a 15% annual prepayment allowance. However, TD’s mortgage rates generally remain higher than those offered elsewhere.
US Anti-Money-Laundering fines
In October 2024, TD Bank received a historic $3.1 billion penalty from U.S. regulators for significant anti-money laundering compliance failures. The bank’s U.S. operations now face growth restrictions, with assets capped at $434 billion, though these limitations do not affect Canadian mortgage operations.
In response to these challenges, TD has committed over $500 million to enhance its compliance efforts and platform improvements—maintaining financial strength and operational flexibility to serve customers.
Advantages
- Flexible payment features, including 100% payment increase options and 15% annual prepayment allowances.
- Extensive branch network across Canada with dedicated mortgage specialists who understand various localities.
- Unique payment relief options, including payment vacation and payment pause features.
Drawbacks
- Posted rates are typically higher than those offered by smaller institutions.
- Mixed customer service experiences with a 1.9/5 Trustpilot rating (156 reviews).
- Fewer overall mortgage options, with TD Home Equity FlexLine being more rigid than comparable programs.
TD Mortgage Products and Services
Core Mortgage Products:
Fixed-rate mortgages
TD’s fixed-rate mortgages offer terms ranging from 6 months to 10 years, with a 120-day rate hold guarantee protecting borrowers during their home search. The program provides predictable payment structures with locked-in interest rates, giving borrowers clear visibility into principal and interest allocation throughout their term. Customer experiences regarding the bank’s services are generally positive, though some report challenges with unexpected fees, communication, and renewal negotiations.
Variable-rate mortgages
TD’s variable-rate mortgages are only available for a five-year term. As usual, borrowers have fixed monthly payments that don’t change with rates. Instead, a change in TD’s Mortgage Prime Rate will adjust the proportion of each payment directed towards principal and interest. For example, a rising interest rate will reduce the amount of principal you repay with each mortgage payment.
Otherwise, the mortgage includes a convertibility feature that allows switching to a fixed rate. Customer reviews are mixed—some are delighted with a helpful, straightforward process, while others begrudge slow response times, inconsistent service, and higher rates than elsewhere.
Mortgage refinance
TD’s mortgage refinancing allows homeowners to make more significant mortgage changes. The process replaces your mortgage—potentially changing rates, term lengths, and amortization periods. You can also “cash out” during a refinance, with common uses including debt consolidation, funding home renovations, or taking advantage of investment opportunities.
The program permits borrowing up to 80% of your home’s equity, subject to qualification and additional charges. Refinancing before your mortgage term ends may trigger prepayment charges, and increasing your borrowed amount could extend your amortization period. It’s best to time your refinance with your renewal date to avoid prepayment penalties.
Specialized mortgage products:
TD Home Equity FlexLine
TD’s Home Equity FlexLine is a home equity loan that you can structure as a HELOC or “Term Portion.” The product allows borrowers to access up to 80% of their home’s value with the term portion or up to 65% with a HELOC. The term portion, similar to a second mortgage, provides more stability—whereas the HELOC is a revolving line of credit you can withdraw from and pay down as needed. Either variant permits equity access through a TD Access Card, cheques, or online banking.
Despite the ability to convert from the HELOC to Term Portion, this product is more rigid than comparable programs, like Scotiabank’s STEP, which automatically increases your credit limit as you pay down your mortgage. Consider TD’s Home Equity FlexLine as a traditional HELOC or second mortgage.
TD Mortgages: Use Your Equity For An Upgrade
TD New to Canada mortgage
TD New to Canada Mortgage helps newcomers with up to five years of experience in Canada purchase a home with down payment options starting at 5% and specialized qualification criteria. The program requires at least three months of full-time Canadian employment but accepts applicants with limited Canadian credit history—so long as applicants demonstrate a valid work permit or permanent residency. TD provides additional support through dedicated mortgage specialists who understand immigration documentation.
TD’s cross-border U.S. mortgage
TD offers U.S. home lending solutions for Canadians buying property in the United States, with mortgages available through TD Bank’s U.S. subsidiary. The program requires a minimum 20% down payment and takes 45-60 days to process. The process permits using Canadian credit history, income, and assets to qualify for a United States mortgage. That said, the ongoing anti-money laundering fines and growth restrictions could stifle this program’s accessibility.
TD’s multi-unit residential mortgage
TD Multi-Unit Residential Mortgage finances properties with five or more rental units up to 75% LTV or 85% with CMHC insurance. The program includes custom financing options for investors and corporations.
Second mortgage
TD offers second mortgages as an additional financing option secured against your home’s equity while maintaining your existing first mortgage. The program allows borrowing up to 80% of your home’s value minus your current mortgage balance. Typical uses include debt consolidation at potentially lower interest rates, funding significant purchases, or financing renovations.
Second property mortgage
TD provides financing options for second property purchases, whether for vacation homes, cottages, or investment properties. The program requires a minimum 20% down payment, and borrowers should note that the Home Buyers Plan RRSP withdrawals are not eligible for second properties. When considering a second property, buyers should budget for additional mortgage payments, utility costs, and property taxes.
Bridge financing
TD’s bridge financing helps buyers manage timing gaps between purchasing a new home and selling their current property. This short-term loan typically extends to 90 days with interest rates comparable to open mortgage rates. To qualify, borrowers must provide both a sale agreement for their current home and a purchase agreement for the new property, along with TD mortgage approval on the new property.
Additional mortgage features:
- Payment Vacation: This unique feature lets you skip up to four months of payments when you’ve built up prepayment credits.
- Payment Pause: Skip one payment annually, with a maximum of 4 skips during your mortgage term.
- Accelerated Payment Schedules: Increase payment frequency from monthly to rapid weekly or bi-weekly to pay down your mortgage faster.
- Lump Sum Allowance: You can make annual prepayments up to 15% of the original mortgage amount without penalties. This allowance applies to closed mortgages.
- Payment Increase: Boost your monthly payments by up to 100% to pay your mortgage faster.
- Open Mortgages: Make unlimited prepayments without penalties, though usually at higher interest rates.
- 120-Day Rate Hold: Lock in your mortgage rate for 120 days while house hunting. Applies to fixed-rate mortgages.
- TD Mortgage Protection: Optional insurance coverage for your mortgage payments in case of disability, critical illness, or death.
- Portability: Transfer your existing mortgage to a new property without losing your rate and term.
- TD Mortgage Offer: Limited-time mortgage promotions that provide benefits with certain qualifying features. Currently offering up to $4,100 in cashback.
Factors influencing TD’s mortgage rate
The economy, type of mortgage, and individual borrower profiles determine TD’s mortgage rates. The bank’s prime rates follow the Bank of Canada’s overnight rate, which adjusts based on inflation targets and economic growth.
The type of mortgage you select also impacts your mortgage rate, with extended term lengths generally commanding higher interest rates than their shorter counterparts. Otherwise, open mortgages also generally have higher interest rates than closed mortgages due to increased prepayment flexibility. A fixed vs. variable rate mortgage reflects the decision between predictable payments or potential savings.
That said, the borrower’s creditworthiness also plays a crucial role in TD’s mortgage rates, encompassing loan-to-value, debt-to-income ratios, and credit score. Given their reduced risk profile, more creditworthy clients generally qualify for better rates.
Getting the best mortgage rate with TD
To secure TD’s best mortgage rate, establish a strong financial profile with a credit score above 680, a substantial down payment (ideally 20% or more), and a healthy debt-to-income ratio. While down payments below 20% can receive lower interest rates thanks to mortgage default insurance, it comes with a new set of fees. Otherwise, remember that posted rates are typically higher starting points for negotiation.
Leverage TD’s Mortgage Direct platform to obtain initial quotes, then shop actively with other lenders to gather competing offers. TD’s mortgage specialists can potentially match or beat competitor rates, especially when you’re willing to bundle additional TD banking products. Their 120-day rate hold provides ample time to secure favourable terms, and their special mortgage offers can offset costs.
TD mortgage application process
Eligibility criteria
As of January 2023, Canadian lenders like TD can only provide mortgages to Canadian Citizens, Permanent Residents, or Indians as defined under the Indian Act. The following section details additional requirements to qualify for a TD mortgage.
Income and debt service ratio
TD evaluates mortgage applications using standard debt service ratios. Your gross debt service (GDS) ratio, including projected housing-specific costs, must not exceed 35% of your income. Meanwhile, your total debt service (TDS) ratio, extending to all debt repayments, must stay under 42%. Lenders prefer lower ratios, demonstrating a higher income cushion to cover expenses.
Note that these ratios are subject to a stress test, which simulates your ratios under enhanced mortgage rates. Otherwise, TD requires a stable employment history and additional documentation for self-employed applicants.
Credit score
TD typically requires a minimum credit score of 680—but higher is much better. As one of Canada’s big banks, TD maintains strict lending criteria, favouring borrowers with established credit accounts in good standing and no recent negative marks on their credit reports.
Down payment
As per Canadian mortgage regulations, TD offers a minimum 5% down payment. The 5% down payment is only eligible for home values under $500,000, with a 10% down payment on values between $500,000 and $1.5 million (extended from $1 million in December 2024).
That means a blended minimum down payment between 5% and 10%, depending on your home’s purchase cost. Furthermore, down payments below 20% require additional mortgage default insurance, which adds additional borrowing costs.
Mortgage pre-approval
TD’s mortgage pre-approval process offers an immediate online response and secures a 120-day rate hold. Through TD Mortgage Direct, you can quickly connect with a mortgage specialist who reviews your application comprehensively and helps match you with suitable mortgage solutions.
During the pre-approval stage, you can negotiate with TD’s mortgage specialists, particularly when presenting competitive offers from other lenders. Otherwise, TD’s mortgage affordability calculators help estimate your home-buying budget before starting the formal application.
Application checklist
When applying for a TD mortgage, you must provide comprehensive documentation to support your application. While the screenshot below covers everything in detail, here’s an overview of what you’ll need:
- Personal Information
- Financial Documentation
- Property Information
Mortgage prepayment penalties
TD structures its prepayment charges based on whether you have an open or closed mortgage, with different calculations for fixed and variable rates. The bank has a prepayment charge calculator, and while this section covers everything in detail, it’s worth remembering there are no penalties for open mortgages with TD.
| Closed Mortgage | Open Mortgage | |
|---|---|---|
| Variable-Rate | Three months’ interest | No prepayment penalties |
| Fixed-Rate | Higher of three months’ interest, or interest rate differential (IRD) | No prepayment penalties |
TD’s prepayment privileges are more generous for closed mortgages than some competitors. The bank allows you to make annual lump-sum payments of up to 15% of your original mortgage amount without penalties. You can also increase your regular payments by up to 100% during your mortgage term.
For closed variable-rate mortgages, breaking your term early triggers a three-month interest penalty at your current rate. Fixed-rate mortgages require paying more than three months’ interest or the Interest Rate Differential (IRD). The IRD calculation measures the difference between your principal amount and what you would owe using a similar posted mortgage rate minus any rate discount you received.
To minimize potential penalties, TD offers flexible payment features like a payment pause, payment vacation, and portability—with everything covered above in the “Additional Mortgage Features” section.
Mortgage renewal
TD provides a 120-day early renewal window without prepayment charges—meaning you can renew your mortgage four months before the term ends. You can secure a new mortgage at TD, switch lenders, or refinance during this period without triggering prepayment penalties. While TD promotes special digital rates when renewing online, it’s always worth shopping around and negotiating the best rate. However, switching to another bank often requires you to pass the stress test again.
TD offers multiple mortgage renewal channels to accommodate different preferences. You can renew through TD EasyWeb or the TD mobile app online, meet with a TD Mortgage Specialist, or handle the renewal by phone. If you don’t take action, your mortgage may automatically renew into a one-year open mortgage at the renewal offer rate, which typically carries higher interest rates.
TD alternatives and competitors
RBC
RBC offers a more diverse range of specialized mortgage products than TD, including unique offerings like 95% LTV vacation home mortgages and comprehensive cross-border solutions. However, TD provides more generous prepayment privileges, allowing 15% annual lump-sum payments compared to RBC’s 10%, and offers more flexible payment features, including payment vacations and 100% payment increase options. Both banks typically align on posted rates and require similar negotiation strategies.
Bank of Montreal (BMO)
BMO offers an extended rate hold period of 130 days compared to TD’s 120 days and provides more generous prepayment privileges with up to 20% annual lump-sum allowances compared to TD’s 15%. Both banks offer similar rates, newcomer programs, and payment flexibility options, making their mortgage offerings comparable.
Scotiabank
Scotiabank matches TD’s 120-day rate hold period but offers up to 20% prepayment allowances—higher than TD’s 15%. Both banks offer comparable products, rates, and newcomer programs, but Scotiabank’s STEP program outshines TD’s Home Equity FlexLine when it comes to flexibly leveraging home equity.
Takeaway
TD is a leading Canadian mortgage lender with a strong digital platform and flexible payment options. Its mortgage products feature 15% prepayment allowances and payment increase options up to 100%, setting it apart from some competitors.
While TD’s posted rates align with other major banks, borrowers should negotiate and compare offers across lenders to secure optimal rates. TD’s Canadian mortgage operations continue to perform strongly, independent of recent U.S. regulatory issues.
Frequently Asked Questions
Are TD mortgages good?
TD mortgages offer reasonably competitive rates, flexible payment features, and a convenient application process, though you can get lower rates elsewhere.
Can I negotiate my mortgage rate with TD?
Yes, TD’s posted rates are starting points for negotiation. Mortgage specialists can request rate exceptions and better pricing, especially when presented with competitive offers from other lenders.
What credit score do you need for a TD mortgage?
TD typically requires a minimum credit score of 680 as it is one of Canada’s big banks with stricter lending criteria.
Why does TD have a mortgage prime rate?
TD is unique among Canadian banks because it maintains a separate mortgage prime rate, typically set 0.15% above its standard prime rate. This mortgage-specific prime rate serves as the foundation for their variable-rate mortgage products.
Last modified: April 2, 2025
