Canada new mortgage rules 2027: every rule change since 2023 and what it means for buyers

Two changes tied for the biggest impact: (1) The insured mortgage price cap raised from $1M to $1.5M (December 2024) — this opened insured financing to buyers in Toronto and Vancouver who were previously locked into uninsured rates. (2) 30-year amortization for insured mortgages extended to first-time buyers and new construction (August 2024) — this reduced monthly payments and improved affordability qualification. Both changes were part of the federal government's housing affordability package. Finance Canada's mortgage reform announcement.

The stress test rate formula remains the same: higher of (contract rate + 2%) or the Bank of Canada benchmark qualifying rate (floor: 5.25%). What changed: (1) Renewal exemption (Nov 2024): borrowers switching lenders at maturity for a straight renewal no longer face the stress test — this removed a barrier to shopping for better rates. (2) OSFI has signaled no plans to change the floor rate in 2027 despite declining BoC policy rates. The stress test still applies to all new purchases and refinances. OSFI Guideline B-20 is the authoritative source.

The HBP withdrawal limit increased from $25,000 to $35,000 per person effective April 2024 (Budget 2024). This was the first increase in the limit since 2019. A couple can now withdraw up to $70,000 combined. Repayment rules remain the same: 15-year repayment period, beginning 2 years after the withdrawal year. Combined with the FHSA (up to $40,000 per person), a couple can access up to $150,000 in registered savings for a first home down payment. Full rules at CRA's HBP page.

Before December 2024, any purchase over $1M required 20% down — no CMHC-insured mortgage was available regardless of down payment size. Now, purchases between $1M and $1.5M can access insured mortgages with a minimum 10% down payment. This is significant in Toronto and Vancouver where the average detached home price exceeds $1M. The insured rate is typically 0.10–0.30% lower than uninsured, and buyers can access higher purchase prices with less cash down. CMHC premiums still apply (at 3.10% for 10% down). The $1.5M cap creates a hard cutoff — purchases above $1.5M still require 20% down. FCAC mortgage insurance overview.

Budget 2024 introduced a change allowing insured mortgage refinancing to fund the construction of a secondary suite (basement apartment, laneway house, or garden suite) on a property where one already exists or zoning permits one. This allows homeowners to refinance up to 90% LTV (vs 80% limit for standard refinancing) to fund suite construction — with CMHC insurance covering the incremental amount. Purpose: increase rental housing supply. This is the first time CMHC insurance has been available for a refinance (not just purchase). The program has specific eligibility criteria and the suite must be for long-term rental use. CMHC secondary suite program details.

No — most 2024 changes were specific to insured mortgages (less than 20% down). Specifically: the $1.5M price cap, 30-year amortization eligibility, and secondary suite refinancing all apply only to insured mortgages. Uninsured mortgages (20%+ down, or purchases over $1.5M) are still capped at 25-year amortization for federally regulated lenders, and the standard stress test still applies. Credit unions (provincially regulated) may have slightly different rules in some provinces. The stress test renewal exemption applies to both insured and uninsured renewals when switching lenders. OSFI Guideline B-20 scope.