2026 Canadian Mortgage Rules: December 2024 Reforms, Straight Switch Exemption & CMHC Updates Explained
The maximum purchase price eligible for insured mortgage financing increased from $1 million to $1.5 million, effective December 15, 2024, expanding access in high-cost Canadian housing markets.
30-year amortizations became available for first-time buyers and all purchasers of new-build homes on insured mortgages, effective December 15, 2024, lowering monthly payment obligations.
OSFI introduced portfolio-level LTI (Loan-to-Income) limits on federally regulated lenders to cap concentrations of highly leveraged mortgages — a systemic risk measure that does not directly restrict individual borrower qualification but may influence lender appetite in certain segments.
Expert Research FAQ
How does the 'straight switch' exemption benefit you at renewal?
This could save borrowers money by securing a lower rate without re-qualifying under stricter conditions.
You may not need to requalify at a higher interest rate when you renew your uninsured mortgage with a new lender.
A 'straight switch' means moving your existing mortgage to a new lender without increasing your loan amount or extending your repayment period.
Lenders will still look at your ability to repay your mortgage.
Your debt payments compared to your income should be at a comfortable level, even if interest rates rise.
Lenders will consider the current and future economy when setting your qualifying interest rate.
What are Loan-to-Income (LTI) limits and how will they affect institutional mortgage portfolios?
These limits, which take effect in fiscal Q1 2025, apply to portfolios, not individual borrowers.
New rules limit how much risk lenders can take on their overall mortgage business.
These changes won't directly affect your ability to get a mortgage or renew your existing mortgage.
Lenders are expected to follow these new rules starting in early 2025.
The government will keep an eye on how well these limits are working.
The government may rethink the mortgage stress test after these new rules are in place, as they both aim to ensure responsible lending.
How does mortgage insurance mitigate risk and support new home buyers?
FRFIs must assess mortgage insurers' financial stability and claims payment history.
Mortgage insurance helps protect lenders if you can't make your mortgage payments.
Mortgage insurance doesn't replace the need for careful assessment of your ability to repay your mortgage.
Your lender can use mortgage insurance from either a government agency or a private company.
Your lender can choose either option, but they need to carefully assess the insurer they use.
If your mortgage is insured, your lender needs to follow the insurer's rules for things like property value and required information.
What are the rules around Home Equity Lines of Credit (HELOCs) for you?
While additional mortgage credit beyond this 65% LTV is allowed, it must be amortized.
Your Home Equity Line of Credit (HELOC) usually can't be more than 65% of your home's value.
You can borrow more than 65% of your home's value, but that extra portion must be paid off with regular payments like a mortgage.
Lenders generally want the average amount borrowed on HELOCs to be less than their maximum advertised limit.
Lenders will work to reduce risks with HELOCs, ensure you can repay what you borrow, and keep a close eye on your credit.
Your lender might re-evaluate your HELOC limit if your home's value drops significantly or your financial situation changes a lot.
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Frequently Asked
How does the 'straight switch' exemption benefit you at renewal?
What are Loan-to-Income (LTI) limits and how will they affect institutional mortgage portfolios?
How does mortgage insurance mitigate risk and support new home buyers?
What are the rules around Home Equity Lines of Credit (HELOCs) for you?
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