New Mortgage Rules 2024-2026: What Ontario Borrowers Need to Know

The mortgage rules you qualified under two years ago are not the same rules that apply today. Between the 2024 federal budget and the fall economic statement, the federal government and OSFI introduced a set of borrower-friendly mortgage changes, following the tightening of the stress test in 2021. If you are buying, renewing, or refinancing in Ontario in 2026, these changes directly affect your options and your costs.2

This guide covers each major change, explains who benefits, and shows how the rules work in practice with illustrative Ontario scenarios.

The Big Picture: Three Changes That Matter

Three rule changes from 2024 are reshaping Ontario's mortgage market right now:

Together, these changes address the three biggest complaints borrowers had during the 2022-2023 rate hike era: being trapped at renewal, being priced out as a first-time buyer, and needing enormous down payments for Ontario's expensive housing stock.

Stress Test Removal for Switches: A Real Advantage at Renewal

Before this change, switching lenders at renewal on an uninsured mortgage required passing the mortgage stress test, known as the Minimum Qualifying Rate, which means qualifying at your contract rate plus 2% (or the 5.25% floor, whichever is higher). This meant that a borrower who had been faithfully paying their mortgage for five years could be told they do not qualify to move their exact same mortgage to a different lender offering a better rate.

The absurdity was obvious: the borrower has proven they can handle the payments. They are not asking for more money. They just want a lower rate. But the stress test treated the switch like a new mortgage application.

As of 21 November 2024, OSFI exempts straight switches of uninsured mortgages between federally regulated lenders from the Minimum Qualifying Rate, provided the loan amount and the remaining amortization do not increase. The effects can be significant:4

• Potentially more competitive renewal offers. Lenders can no longer count on the Minimum Qualifying Rate keeping eligible borrowers in place, which may lead to more competitive renewal offers.
• Access to monoline lenders. Monoline lenders (non-bank mortgage companies) price differently from the big banks, and some borrowers prefer to compare them. Previously, the stress test made switching to these lenders harder. For an eligible straight switch it no longer applies, as long as the new lender is also federally regulated.
• Reduced private lending demand for renewals. Some borrowers who could not pass the stress test to switch may have turned to private lenders as a bridge. With the switch exemption, some of them can go directly to a conventional lender.

Who Does NOT Benefit

The exemption only applies to a straight switch at renewal between two federally regulated lenders, with the same loan amount and the same remaining amortization. If you want to refinance and pull out equity, consolidate debt into your mortgage, increase your amortization, or move to or from a lender that is not federally regulated, the new loan is assessed as a new application, including the stress test.

30-Year Amortizations for First-Time Buyers and New-Build Buyers

Insured mortgages (where the borrower puts less than 20% down) were previously capped at 25-year amortizations. Since 15 December 2024, a 30-year amortization is available on insured mortgages to first-time buyers, and separately to any buyer of a newly built home whether or not they are a first-time buyer.3

The Dollar Impact

Illustrative figures at a hypothetical 4.19% rate, calculated with semi-annual compounding. They exclude any insurance premium, including any surcharge, and are not a rate quote.

The trade-off is meaningful. A $500,000 mortgage at 4.19% over 30 years costs approximately $375,400 in total interest, compared to $304,600 over 25 years. That is an extra $70,800 in interest for the lower monthly payment. For a first-time buyer in Ontario stretching to enter the market, that $250 per month in reduced payments may affect whether they qualify.

A practical note: if you start with a 30-year amortization but your income grows over the first few years, many lenders allow you to increase your payment amount at renewal or through prepayment privileges. Starting at 30 years does not mean you are committed to 30 years.

The $1.5 Million Insured Mortgage Cap

This change is particularly relevant in Ontario, where many homes in the Greater Toronto Area are priced above $1 million.

Previously, the insured mortgage cap was $1 million. Any purchase above that required an uninsured mortgage, meaning a minimum 20% down payment. For a $1.3 million home, that meant $260,000 in cash before closing costs.

Under the new rules, in force since 15 December 2024, a first-time buyer purchasing that same $1.3 million home needs:3

• 5% on the first $500,000 = $25,0008
• 10% on the remaining $800,000 = $80,000
• Total down payment: $105,000 (versus $260,000 under the old rules)

That $155,000 difference is significant for Ontario buyers. It brings homeownership within reach for families who have been saving for years but could not close the gap between their savings and the 20% threshold.

Insured mortgages also tend to carry lower interest rates than uninsured mortgages, because the mortgage insurance reduces the lender's risk. The mortgage insurance premium itself, which can be rolled into the mortgage, ranges from 2.80% to 4.00% of the loan amount for the down payment tiers typical of an insured purchase (5% to just under 20% down); it adds to the total cost but is partially offset over the term by the lower rate.5

What OSFI Is Reviewing in 2026

The Office of the Superintendent of Financial Institutions (OSFI) regulates how federally regulated lenders underwrite mortgages, currently under Guideline B-20. On 29 January 2026, OSFI published a consultative document proposing a new Credit Risk Management (CRM) Guideline that would consolidate the expectations currently in Guideline B-20, along with related advisories, notices and letters, into a single credit-risk framework covering federally regulated lending. The consultation closed 29 July 2026.7

• B-20 consolidation. The proposed CRM Guideline would fold B-20's expectations into a real estate secured lending chapter within a single guideline, alongside other credit risk guidance.
• Loan-to-income limits. OSFI introduced loan-to-income (LTI) limits on lenders' uninsured mortgage portfolios alongside the November 2024 switch exemption. They apply at the portfolio level, not to individual borrowers.
• No specific changes published yet. As of this update, OSFI has not published a final CRM Guideline or announced specific changes to the stress test buffer (currently contract rate plus 2%), the GDS or TDS limits, or self-employed income verification. Any such detail would come with the final guideline, not the consultative document.

Any changes would take months to put in place after a final guideline is issued and would only affect federally regulated lenders directly. Mortgage brokerages in Ontario are regulated provincially by FSRA, separately from OSFI.1

How These Rules Play Out in Practice

The three scenarios below are illustrative only, built from round numbers to show how the rules interact. They are not quotes and are not based on any individual client's file.

Illustrative Scenario: Renewal Borrower in Oakville

A homeowner in Oakville has a $520,000 uninsured mortgage renewing in April 2026. The borrower's current lender offered a 5-year fixed rate of 4.39%. The borrower's household income is $115,000 with a car payment of $480 per month. Under the old rules, the stress test at 6.39% would have been measured against the new lender's debt-service limits, and with the car payment the borrower might not have passed. The borrower could have been left with the 4.39% offer.

Under the straight-switch exemption, the borrower switches to a different federally regulated lender at a hypothetical 3.89% without passing the stress test. On a $520,000 balance, a 0.5-point rate difference works out to roughly $2,600 a year in interest at the starting balance, before accounting for the amortization schedule. Hypothetical rates, for illustration only.

Illustrative Scenario: First-Time Buyer in Kitchener

A couple in Kitchener with a combined income of $125,000 and $65,000 saved wants to buy a townhouse at $620,000, for a mortgage of about $555,000. With a 30-year amortization at a hypothetical 4.09% insured rate, their monthly payment is approximately $2,667. With the old 25-year cap, the payment would be approximately $2,947. That roughly $280 monthly difference lowers the GDS ratio the lender calculates, which CMHC caps at 39% for insured mortgages.6 It could affect whether they fit under that limit.

Illustrative Scenario: Move-Up Buyer in Markham

A family in Markham is selling their condo and purchasing a detached home at $1.35 million. After the condo sale, they have $120,000 for a down payment. Under the old $1 million cap, they would have needed $270,000 down (20%). Under the new $1.5 million cap, $120,000 is sufficient (5% on $500K + 10% on $850K = $110,000, with $10,000 remaining for closing costs). They also access insured-mortgage pricing instead of needing a larger, uninsured mortgage.

These rule changes do not make housing affordable in any absolute sense. Ontario homes are still expensive, mortgages are still large, and interest rates are still well above pandemic lows. But the changes meaningfully expand who qualifies and at what cost. If you were declined or constrained under the old rules, it is worth checking again.