Asking Rents Have Fallen for Two Years: What Ontario Landlords Should Check Before Renewal
If you own a rental property in Ontario, the next lender conversation may involve the rent you can document, not the rent you could once have asked. Here is what to check.
The short version
- Rentals.ca and Urbanation report national asking rents down 4.2% in September from a year earlier, and 7.3% over two years.
- Asking rents are what new listings advertise, not what your current tenants pay. A lender usually works from your lease and your documents.
- Lenders commonly count only part of the rent toward your income, so a lower rent can change your qualifying more than the headline suggests.
- Apartments and condos in Ontario were down 3.7%, the report says, but Toronto and Vancouver showed signs of steadying.
What the data says
Canadian asking rents posted their 24th straight year-over-year decline in September, according to the latest report from Rentals.ca and Urbanation, as covered by Canadian Mortgage Trends.
The average asking rent across all property types was $2,034, down 4.2% from a year earlier and 7.3% over two years, the lowest September level since 2022. Condo rents were weakest, down 7.8% to $2,052, while purpose-built apartment rents fell 2.7%. Provincially, Ontario's apartment and condo asking rents were down 3.7%.
There was a note of stabilization. Urbanation president Shaun Hildebrand said new supply is moving past its peak in Toronto and Vancouver. Toronto's asking rents were down 1.4% from a year earlier, a narrower decline than earlier in the year. The report also cautions that it tracks asking rents on available listings, not what existing tenants pay, and that changes in the mix of listings affect the averages.
Asking rent is not your lease
This is the distinction that matters. A lender renewing or refinancing your property will usually look at your signed lease, evidence of rent received and your tax filings, not a market survey. A tenant in place at a lower rent for years may be paying less than today's asking rents, and a unit that recently turned over may have re-leased lower than the last tenant paid.
- Lease on file for each unit, with current rent and term.
- Bank deposits that match the rent shown.
- Vacancy history for the last two years.
- Property tax, insurance, utilities and any condo fees, because lenders weigh expenses too.
How a lender might count the rent
Policies differ. For a rental property owned alongside a principal residence, a lender may count only a portion of the rent as income, or add it to the property's cash flow after expenses. Ranges vary by lender and by insurer. The example below shows why it matters, using an assumed 50% inclusion for illustration only.
We cover the CMHC treatment of a secondary suite in this article.
If your rental mortgage renews soon
A straight renewal with your current lender often does not re-run the stress test, while switching lenders is a new application. That is explained on our mortgage renewal page. For a landlord, that can make staying put the simpler choice even when the numbers elsewhere look appealing, and it is worth asking before you assume a switch is possible.
If you want to pull equity out to buy another property or fund repairs, the refinance page covers how that works and what it costs.
Vacancy and turnover matter more than the average
An average asking rent says little about one building. If a tenant leaves, two things can happen: the unit re-leases at a new price, and it may sit empty for a stretch first. Both lower your documented income. A cushion that covers two months of vacancy and a lower re-lease price is a more practical test than assuming last year's rent holds.
Ontario rules also shape what you can change on an existing tenancy, so the lease in front of the lender may differ from the market. Treat those rules as a reason to keep clean records, and speak with a paralegal or lawyer about tenancy questions, which sit outside a mortgage broker's role.
The wider Ontario picture
CMHC expects Ontario mortgage arrears, 0.32% in the second quarter, to keep rising through mid-2027, as the Canadian Press reported. A landlord with thin cash flow and a variable-payment mortgage has less room if borrowing costs rise again. Knowing your break-even occupancy and your payment at a higher cost is more useful than a rent forecast.
What to do this month
- Gather leases and recent rent deposits for every unit.
- Total your annual expenses and compare them with rent actually received.
- Calculate your payment at a higher borrowing cost than today's.
- Book your renewal conversation early, within the lender's renewal window.
- Ask whether your lender counts rent differently for a renewal than for a new purchase.
Nearly thirty years in Canadian financial services, based in Waterloo Region and working across Ontario. Most people are handed a product — you deserve a plan.
Everything here is illustrative and subject to lender approval and final terms. Figures are examples built on stated assumptions, not quotes, and lender policies differ.
Sources: Canadian Mortgage Trends — Canadian asking rents fall 4.2%, extending declines to two years · Canadian Press via CMT — BoC warns of ‘subdued’ outlook for housing market as rate hike raises borrowing costs · Rentals.ca — National rent report