Ontario Rent Increase Calculator: How to Calculate Your 2026 and 2027 Increase

The Formula

Calculating an Ontario rent increase is a single multiplication:

New Monthly Rent = Current Lawful Rent × (1 + Guideline Rate / 100)

The guideline rate for 2026 is 2.1%. For 2027, it's 1.9%. The rate that applies is determined by the effective date of the increase — not the date you serve the notice or fill out the form.

Step-by-Step Calculation

1. Establish the lawful base rent. This is the amount legally chargeable under the RTA — the rent your tenant is currently obligated to pay. It's not the advertised rent, a temporarily discounted rate, or an amount that includes unlawful charges. Standard prompt-payment discounts (capped at 2% of rent) don't change the base. If parking or storage was severed under RTA Section 123, exclude those charges.

2. Pick the correct guideline year. Match the rate to your effective date:

3. Multiply and round. Round the result to the nearest cent using standard rounding (round up at $0.005).

Worked Examples

$1,800/month, 2027 effective date: $1,800.00 × 1.019 = $1,834.20 Monthly increase: $34.20

$2,200/month, 2026 effective date: $2,200.00 × 1.021 = $2,246.20 Monthly increase: $46.20

$2,750/month, 2027 effective date: $2,750.00 × 1.019 = $2,802.25 Monthly increase: $52.25

$1,450/month, 2026 effective date: $1,450.00 × 1.021 = $1,480.45 Monthly increase: $30.45

The Rounding Trap

Form N1 requires the new rent to be entered in dollars and cents. A rounding error — even half a cent in the wrong direction — technically makes the notice defective. Always carry the calculation to at least three decimal places before rounding the final figure.

If your calculator shows $2,246.195, the correct rounded value is $2,246.20 (round up at 5). Entering $2,246.19 on the form would understate the increase (not invalid, but you'd lose a penny per month), while entering $2,246.25 would overstate it (potentially invalid if challenged).

What You Cannot Calculate Into the Increase

The guideline percentage applies only to the lawful base rent. You cannot fold other cost increases into the N1 calculation:

• Municipal property tax increases (these require a separate Above-Guideline Increase application on Form L5)
• Capital expenditure costs (also require Form L5)
• Utility cost changes
• Inflation beyond the guideline cap

If property taxes or capital costs have increased substantially, the AGI route through the LTB is the formal mechanism — not a higher percentage on the N1.

Separate air-conditioner rule. Under RTA Section 36.1, if a tenant installs and uses a window or portable air conditioner on or after July 1, 2026, and the landlord is obligated under the tenancy agreement to supply electricity, the landlord may charge a separate increase up to the actual electricity cost (or a reasonable estimate if the actual cost cannot be established). This increase does not apply if the tenancy agreement expressly allows the air conditioner without a rent increase. The charge is outside the N1 guideline calculation, and Sections 110, 116, 119, and 120 do not apply to it. The amount must be reduced when the unit is removed or is no longer used seasonally.

The Calendar Side of the Calculation

Beyond the dollar math, the other half of the calculation is the notice timeline. For a January 1, 2027 effective date:

1. Start from January 1, 2027
2. Exclude the effective date itself and count back 90 clear days → tenant must receive the notice by October 3, 2026
3. If serving by mail, subtract 5 more calendar days for deemed service → mail by September 28, 2026

The Ontario Rent Increase Guide includes both a rent increase calculation sheet and a notice timeline planner that handle the math and the calendar together — including the LMR deposit reconciliation that offsets the annual interest owed against the deposit top-up.

See more Ontario guides →