Your Landlord Owes You Interest on Your Rent Deposit
(Most Never Pay It)

If you paid a last month's rent deposit when you moved in, Ontario law entitles you to annual interest on it — at the same rate as that year's provincial rent increase guideline, paid or credited to you every twelve months for as long as the tenancy runs. Almost nobody collects it. On Mississauga's $2,349 average rent, a deposit paid in 2020 and never topped up has quietly earned about $305 in interest its landlord was legally required to pay and, in most cases, didn't.

This isn't a grey area or a negotiating tactic — it's Section 106 of the Residential Tenancies Act, and failing to pay it is a provincial offence with a fine of up to $100,000 for an individual landlord. The gap exists because almost no one checks, and the Landlord and Tenant Board only acts when a tenant files.

What a Landlord Can Ask For — and What They Can't

Ontario permits exactly two kinds of deposit. A rent deposit, capped at one month's rent (or one week's, for a weekly tenancy), which the landlord can only apply toward your final rental period — never toward cleaning, damage, or anything else, and never withheld against a move-out inspection. And a key deposit, capped at the actual replacement cost of the keys, fobs, or access cards issued, fully refunded the moment you hand them back.

Everything past those two is not a grey area. A landlord cannot require a damage deposit, a pet deposit, or a deposit secured with post-dated cheques. None of these appear anywhere in the Residential Tenancies Act as a lawful charge, which means a lease clause demanding one doesn't make it enforceable — it just means the clause is void.

The Interest, and What It's Worth

The interest rate on a rent deposit is set every year at exactly the same percentage as that year's provincial rent increase guideline — the same number that caps how much a landlord can raise the rent on an existing tenant. For 2026, that's 2.1%. On a $2,349 deposit — Mississauga's current average rent — that's $49.33 owed for this year alone. It's due within the tenancy year, either paid directly or credited against rent, and it resets every twelve months regardless of whether your rent itself has moved.

Most tenants never receive it, and most landlords never volunteer it — not necessarily out of bad faith; a lot of small landlords genuinely don't know the obligation exists. But the interest doesn't expire just because nobody asked. It accumulates, year over year, for as long as you've held the tenancy and the deposit has gone untopped. Using the same guideline history behind our 2027 rent increase guideline guide, here's roughly what that adds up to on a Mississauga-average deposit, depending on how long you've been renting:

Cumulative % is the simple sum of each year's Government of Ontario rent increase guideline for the years shown (2018: 1.8%, 2019: 1.8%, 2020: 2.2%, 2021: 0%, 2022: 1.2%, 2023: 2.5%, 2024: 2.5%, 2025: 2.5%, 2026: 2.1% — full history in our rent increase guideline guide). This is illustrative, not your own number: it assumes a flat $2,349 deposit and that no interest was ever paid or credited. Your own deposit is whatever your actual last month's rent was when you moved in, and your landlord may have already paid some or all of this — check your rent ledger or bank records before assuming the full amount is outstanding.

Why Landlords Still Skip It

The Government of Ontario's own list of rental housing offences names failing to pay a tenant annual interest on their rent deposit specifically, alongside charging illegal rent and issuing bad-faith eviction notices. On conviction, the penalty is a fine of up to $100,000 for an individual landlord or $500,000 for a corporation. In practice, prosecutions are rare — this is enforced almost entirely through the civil route below, not criminal charges — but the offence status is why the Board treats an unpaid deposit interest claim as straightforward: the obligation isn't discretionary, and there's no landlord defence along the lines of "the lease didn't mention it."

The most common way it gets missed isn't malice — it's paperwork. Small landlords managing one or two units often never learn the rate changes annually, or assume that because the rent hasn't gone up, nothing is owed. Property management companies managing dozens of units are less likely to make that mistake, but more likely to require a tenant to ask before it's paid, banking on the fact that most won't.

How to Collect What You're Owed

Start by asking in writing — email is fine — for a statement of the interest paid on your deposit since move-in, and request payment of any shortfall. Many landlords will simply pay once asked, since it's a small, uncontroversial amount next to the cost of a Board hearing. Calculate what you believe is owed first, using your own deposit amount and the guideline percentage for each year of your tenancy, so the number in your email is specific rather than "some interest."

If that doesn't produce payment, the next step is a Form T1 — Tenant Application for a Rebate of Money the Landlord Owes — filed with the Landlord and Tenant Board. Unpaid deposit interest is one of the application's listed grounds. The filing fee is $53, an adjudicator reviews your tenancy dates and the published guideline history, and a successful application produces a binding order the landlord must comply with. Claims are subject to a one-year limitation period, so don't sit on a shortfall you've already identified.