Pre-construction condos have long been one of the most popular ways to enter Ontario's housing market — but the 2026 mortgage rule changes have rewritten the playbook. Here's what every buyer needs to know before signing on the dotted line.
With the new mortgage stress test calculations and extended amortization options, your buying power has changed significantly. What you could afford even six months ago may no longer apply.
Understanding the changes that impact your purchasing power
The mortgage stress test now uses a more borrower-friendly calculation. Instead of the fixed 5.25% or contract rate + 2%, lenders now use the median of 5-year discounted rates — potentially lowering the bar for approval.
First-time buyers can now access 30-year amortizations on insured mortgages, reducing monthly payments significantly. This is a game-changer for condo buyers managing high purchase prices.
Mortgage insurance premiums have been reduced, and the qualification process streamlined. This means less paperwork and potentially faster approvals for pre-construction purchases.
With the Bank of Canada's rate cuts in 2025-2026, variable rates and fixed rates have both trended downward, making pre-construction locking more attractive than in previous years.
Important: These deposits are held in trust and are refundable under certain conditions. However, once the building is registered, deposits become non-refundable.
Under the new mortgage rules, you can now use RRSP withdrawals (Home Buyers' Plan) for these deposits — up to $60,000 per person. This makes reaching those deposit milestones much more achievable for first-time buyers.
| Cost | Estimated Amount | Notes |
|---|---|---|
| Land Transfer Tax | $8,000 - $25,000+ | Varies by purchase price; Toronto has additional municipal LTT |
| Legal Fees | $1,500 - $3,000 | Includes title search, registration, and disbursements |
| Tarion Warranty | $600 - $1,500 | Mandatory for new construction; ranges by unit size |
| Development Charges | $5,000 - $20,000+ | Fees imposed by municipalities for infrastructure |
| HST | Varies | May be included in purchase price or payable on closing |
| Status Certificate | $100 - $300 | Condo financial and legal review (recommended) |
| Adjustments | Varies | Prepaid condo fees, property taxes, utilities |
The new 30-year amortization means lower monthly payments — but don't forget to factor these closing costs into your overall budget. Many buyers get pre-approval for the mortgage amount but forget these one-time costs, causing stress at closing.
Before visiting a sales gallery, get pre-approved under the new 2026 rules. This tells you exactly what you can afford and strengthens your negotiating position. With the updated stress test, your pre-approval amount may be higher than expected.
Not all pre-construction projects are created equal. Research the developer's track record, read reviews, and check their history of delivering on time. Look at their past projects and speak with current owners if possible.
Hire a real estate lawyer to review the status certificate — this reveals the condo corporation's financial health, any pending lawsuits, and reserve fund status. This step is non-negotiable for smart buyers.
With occupancy typically 2-4 years away, consider whether to lock in a rate now or float. Your mortgage broker can help you time this based on rate forecasts and your risk tolerance.
The pre-construction market in Ontario has opportunities — but having the right mortgage strategy is essential. Let us help you navigate the new rules and find the best financing for your situation.
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