Thursday’s federal budget outlines changes affecting Canada’s housing and mortgage markets, including measures on mortgage qualification, rental construction and consumer banking.
Some measures build on earlier announcements and now have firm start dates. Others still need legislation or regulations, or are headed for consultation.
Here are the budget’s key figures for the deficit, economic growth and federal spending.
BMO Capital Markets expects the budget to have a muted effect on bond yields, which help shape fixed mortgage rates. Ottawa plans to issue $88 billion in 5-year bonds in 2027–28, up from $80 billion this fiscal year. BMO said the increase in overall bond issuance was broadly in line with expectations.
“For now, however, near-term inflation trends and any resolution of the trade dispute will matter more for both yields and the loonie,” BMO’s economists wrote.
Below are 12 measures that affect borrowers, builders and lenders, along with what’s changed and when the measures could take effect.
Shopping for a mortgage
1. Optional mortgage insurance: A higher price cap and 30-year amortizations Proposal
Ottawa proposes raising the home price limit for optional mortgage insurance from $1 million to $1.5 million. That could give a buyer putting 20% down on a $1.2-million home access to more mortgage offers. The lender can choose to insure an eligible loan, which protects the lender and may help it offer a lower rate.
The change would bring the price limit in line with the $1.5-million cap introduced in December 2024 for buyers putting down less than 20%. The budget gives no start date.
- The fine print: A 30-year amortization would be available only if at least one borrower is a first-time buyer or the home is newly built. A longer amortization generally lowers monthly payments but increases total interest paid.
2. Insured mortgage rates: More public data Proposal
The Bank of Canada would publish more timely and detailed information on insured mortgage rates under proposed regulations. Borrowers could use it as a benchmark when comparing quotes.
The budget leaves open which rates would be published, how often the data would be updated and when publication would begin.
3. Mortgage prepayment penalty disclosure Consultation
Ottawa plans to consult on making prepayment penalties easier to understand for people with insured mortgages. These are charges borrowers can face if they sell, refinance or switch lenders before their term ends. The consultation would look at how borrowers can compare those charges. The budget does not propose a cap on the penalties.
4. CRA mortgage income verification Previously announced
Ottawa proposes giving the Canada Revenue Agency the authority to enter into agreements with lenders and insurers to verify mortgage applicants’ income. It also proposes $13 million over three years to develop and test the service, starting in 2027–28. Ottawa expects the industry to help fund the service after the pilot.
Ottawa first raised the idea in 2024, and the CRA had aimed to begin implementing it in early 2025.
- The fine print: Broker access remains unresolved. Mortgage Professionals Canada says it will continue to press for brokers and brokerages to have access.
Building and renting
5. Mortgage insurance for new triplexes and fourplexes Previously announced
Starting Feb. 1, 2027, lenders can submit insurance applications under new rules for triplexes and fourplexes. A builder could get an insured construction loan for up to 90% of the property’s expected value when finished. The rules also cover purchases of eligible newly built properties.
Ottawa signalled the change in its spring economic update and set out the terms in the budget. Its example is a builder planning a $3-million fourplex. Under the new rules, the project could qualify for insured financing because there’s no price cap or requirement for the owner to live in one of the units.
- The fine print: Eligible mortgages on completed properties can have amortizations of up to 30 years and are subject to debt-service limits and the stress test. Insurers set their own underwriting criteria for construction loans.
6. Private mortgage insurance for properties with five to 50 units Expanded
Private insurers will be able to compete with Canada Mortgage and Housing Corp. to insure loans on eligible properties with five to 50 units. That gives lenders another option when financing construction, a purchase, a refinance or a renewal.
The maximum loan is 90% of the property value for new construction and 85% for other transactions. Maximum mortgage amortizations are 50 years for new construction and 40 years for other transactions. Insurers set their own underwriting criteria for construction loans.
The spring proposal covered properties with five to eight units. The budget expands that range to 50. Lenders can submit applications under the new rules starting Feb. 1, 2027.
- The fine print: Owners can’t bundle separately titled properties to meet the unit threshold.
7. Foreign buyer ban: An extension and a proposed new-build exemption Extension
Ottawa proposes extending the federal ban on foreign purchases of existing homes by two years, to Jan. 1, 2029, while exempting new residential properties.
The current ban is scheduled to end Jan. 1, 2027. Ottawa says it will introduce legislation and start a regulatory process. Details of the exemption for new homes are still to come.
8. Canada Housing Benefit: A 10-year renewal Renewal
Ottawa proposes $5.6 billion to renew the Canada Housing Benefit for 10 years, with funding starting in 2028–29. The benefit provides direct rental assistance to low-income households.
Separately, Ottawa proposes funding for supportive and transitional housing through Build Canada Homes. The federal government would help pay to build supportive housing and expects provinces and territories to fund ongoing operations and services.
Banking and household finances
9. Deposit insurance: A higher limit and coverage for home-sale proceeds Proposal
Ottawa proposes raising the federal deposit insurance limit to $250,000 from $100,000. It also proposes temporary coverage for larger balances after certain events, including a home sale, and removing the cap on eligible deposits in registered and tax-free accounts.
The current limit applies per insured category at each member institution.
- The fine print: The budget does not specify how much of a home seller’s proceeds would be covered or for how long.
10. Bank ownership rules: A higher threshold for mid-sized banks Proposal
A bank that reaches $12 billion in equity must be widely held, meaning no shareholder can own 20% or more. Ottawa proposes raising that threshold to $25 billion, giving mid-sized banks more room to expand under their existing owners.
Ottawa also proposes easing ownership rules for some Canadian subsidiaries of foreign banks. Both changes would require amendments to the Bank Act.
11. Bank fees: An annual statement for account holders Proposal
Ottawa plans to develop regulations requiring banks to send customers a single annual statement showing what they paid in fees on chequing and savings accounts. The budget gives no start date.
12. Credit card payments: Paying down higher-interest balances first Consultation
Ottawa plans to consult on requiring credit card issuers to apply payments above the minimum to the highest-interest part of a balance first. That could mean paying off a cash advance before regular purchases on the same card if the advance carries a higher rate. The budget points to Quebec, where the practice is already in place.
Visited 11 times, 11 visit(s) today
budget budget 2026 deficit federal budget federal deficit federal government mortgage mortgage rules
Last modified: November 5, 2026
