# 2026 Canadian Mortgage Rules: December 2024 Reforms, Straight Switch Exemption & CMHC Updates Explained

> December 2024 mortgage reforms expanded insured mortgage access and eased renewals for millions of Canadians. Key changes include a stress-test exemption for uninsured mortgage straight switches, a higher insurable mortgage price cap of $1.5 million, and 30-year amortizations for first-time buyers and new-build purchases. CMHC (Canada Mortgage and Housing Corporation) insurance updates further support diverse borrowers, including self-employed Canadians and those pursuing energy-efficient homes.

Category: Purchasing
Last verified: 2026-02-18
Source: https://ratellow.com/guides/2024-2026-canadian-mortgage-reforms-guide

## TL;DR
- Uninsured mortgages are now exempt from the MQR (Minimum Qualifying Rate) stress test when switching lenders at renewal — effective November 21, 2024. This gives borrowers more negotiating power and lender choice at renewal time.
- 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.
- Two separate effective dates apply to these reforms: November 21, 2024 for the straight switch exemption, and December 15, 2024 for the insurable price cap and amortization changes — brokers and borrowers should confirm which rules apply to their specific transaction timing.

## 2026 Canadian Mortgage Rules: December 2024 Reforms, Straight Switch Exemption & CMHC Updates Explained
Understanding the latest mortgage policy changes helps you make smarter decisions about buying, renewing, or refinancing your home. In Canada, Federally Regulated Financial Institutions (FRFIs) — such as banks and credit unions overseen by OSFI (the Office of the Superintendent of Financial Institutions) — must follow strict lending guidelines that directly shape your mortgage options. The December 2024 reforms introduced meaningful relief for homeowners at renewal and opened new doors for first-time buyers, with most changes taking effect December 15, 2024.

- Switching lenders at renewal just got easier: The 'straight switch' exemption — effective November 21, 2024 — allows uninsured mortgage holders to transfer their mortgage to a new lender at renewal without being subject to the Minimum Qualifying Rate (MQR), commonly known as the stress test. This means you can shop for a better rate at renewal without having to re-qualify at a higher benchmark rate, potentially saving thousands of dollars over your mortgage term.
- Homeownership is now more accessible: Effective December 15, 2024, the maximum purchase price eligible for CMHC (Canada Mortgage and Housing Corporation) mortgage insurance rose from $1 million to $1.5 million. This means buyers in higher-cost markets like Toronto and Vancouver can now access insured financing with a lower down payment, making homeownership more achievable in Canada's most competitive cities.
- 30-year amortizations open the door for more buyers: As of December 15, 2024, first-time homebuyers and anyone purchasing a newly built home can access 30-year amortization periods on CMHC-insured mortgages — up from the previous 25-year maximum. Spreading payments over 30 years reduces your monthly mortgage payment, improving affordability when you're just starting out.
- Get money back for going green: CMHC Eco Plus refunds 25% of your mortgage insurance premium when you buy or build an energy-efficient home using CMHC-insured financing. CMHC Eco Improvement offers the same 25% premium refund when you invest at least $20,000 in qualifying energy efficiency upgrades to your existing home — rewarding you financially for reducing your environmental footprint.
- Self-employed? You still have options: CMHC's Self-Employed mortgage insurance program provides access to insured financing for self-employed individuals who can document their income through alternative means. Whether you're a freelancer, contractor, or small business owner, this program helps you qualify for a mortgage even without traditional T4 employment income verification.

## Mortgage Reform Strategy & FAQ for Brokers
This section equips mortgage brokers with the key details needed to guide clients through the December 2024 mortgage reforms. Brokers should note two distinct effective dates: the straight switch stress-test exemption took effect November 21, 2024, while the insurable price cap increase to $1.5 million and 30-year amortization eligibility expansion both came into force December 15, 2024. Additionally, OSFI's new portfolio-level Loan-to-Income (LTI) limits — which cap the share of highly leveraged mortgages a lender can hold — are designed to manage systemic risk without restricting individual borrower qualification. Brokers should proactively communicate these timelines and distinctions to clients navigating renewals, purchases, or pre-approvals in the current market.

### How does the 'straight switch' exemption benefit you at renewal?
The 'straight switch' exemption lets uninsured mortgage borrowers move their mortgage to a new federally regulated lender (FRFI) at renewal without needing to pass the Minimum Qualifying Rate (MQR) . 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?
OSFI is introducing Loan-to-Income (LTI) limits to reduce risks from high household debt in 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?
Mortgage insurance, offered by CMHC and private insurers, is key for managing risk and enabling homeownership, particularly for buyers with smaller down payments . 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?
FRFIs must limit the non-amortizing HELOC portion of a mortgage to a maximum Loan-to-Value (LTV) ratio of 65% or less . 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.

## Sources
- OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- Mortgage insurance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.5.1
- 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