# How does the Capital Adequacy Requirements (CAR) guideline impact financing options?

> The Capital Adequacy Requirements (CAR) guideline dictates the amount of capital banks and trust companies must hold relative to their risk-weighted assets.

Category: Investor
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/investor/how-does-the-capital-adequacy-requirements-car-guideline-impact-financing-options

## Answer
| Area Affected     | Impact                                    |
|--------------------|-------------------------------------------|
| Lending Terms     | Potential for stricter terms                 |
| Interest Rates    | Possible higher interest rates             |
| Capital Allocation | Banks must allocate more capital for riskier loans |

## Institutional highlights
- Banks need to hold a certain amount of capital, which affects how much they can lend you.
- Your mortgage interest rate can be affected by how risky the bank thinks your loan is.
- Canadian rules are based on international standards for banking safety.
- The government watches banks to make sure they're financially stable.
- Banks will pay extra attention to riskier mortgages, like those for multiple properties.

## Related guide
- https://ratellow.com/guides/commercial-residential-investors

## Sources
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Chapter 6 – Securitization — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-2026-chapter-6-securitization#toc-id-0
- Disclosure requirements — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#3.1