How federal mortgage changes impact Ontario buyers specifically
The federal government has introduced significant mortgage rule changes for 2026 that directly affect Ontario home buyers. From updated stress test requirements to new insured mortgage limits and extended amortization options, understanding these changes is essential for anyone looking to buy a home in Ontario this year.
In this guide, we'll break down exactly how each change impacts Ontario buyers—particularly those in the GTA where home prices remain among the highest in Canada.
The mortgage stress test remains a critical hurdle for Ontario buyers. In 2026, several updates have made qualification slightly more accessible while maintaining financial safeguards.
The Bank of Canada's benchmark rate currently sits at 5.25%, providing a baseline for stress test calculations. This rate is reviewed quarterly.
Borrowers must still qualify at their contract rate plus 2 percentage points. With current rates around 5.50%, this means qualifying at approximately 7.50%.
Lenders now have more flexibility in stress testing uninsured mortgages, which can benefit buyers with strong credit profiles and larger down payments.
Impact on Ontario Buyers: With the average GTA home price exceeding $1 million, passing the stress test requires a household income of approximately $190,000+ for a typical purchase.
CMHC insurance (also known as mortgage default insurance) allows buyers to purchase with down payments as low as 5%. In 2026, the limits on insurable mortgages have been adjusted.
| Region | Previous Limit | 2026 Limit |
|---|---|---|
| Ontario (Most Areas) | $1,000,000 | $1,150,000 |
| GTA Core | $1,250,000 | $1,400,000 |
| Minimum Down Payment | 5% | 5% |
With the increased limits, more Ontario buyers can now secure CMHC insurance on homes up to $1.4 million in the GTA core, avoiding the cost of conventional/uninsured mortgages.
| Down Payment | Premium (% of mortgage) |
|---|---|
| 5% - 9.99% | 4.00% |
| 10% - 14.99% | 3.10% |
| 15% - 19.99% | 2.80% |
| 20%+ | 0% (No insurance required) |
Extended amortizations allow buyers to spread their mortgage payments over a longer period, reducing monthly costs. In 2026, the maximum amortization for insured mortgages has been extended.
Maximum amortization increased to 30 years (up from 25 years). This applies to mortgages with less than 20% down payment.
Maximum amortization remains at 30 years for conventional mortgages.
For buyers with 20%+ down but seeking insurance for portfolio purposes, 30-year amortizations are now widely available.
For a $700,000 mortgage at 5.50% interest:
| Amortization | Monthly Payment | Total Interest | Monthly Savings |
|---|---|---|---|
| 25 Years | $4,253 | $575,900 | — |
| 30 Years | $3,972 | $729,920 | $281/month |
Important Consideration
While longer amortizations reduce monthly payments, they significantly increase total interest paid over the life of the mortgage. Consider making extra payments when possible to pay down principal faster.
The Greater Toronto Area continues to have Canada's highest home prices, creating unique challenges for buyers trying to qualify for mortgages under the new rules.
With the average GTA home price exceeding $1.1 million, many buyers face significant hurdles:
| Home Price | 20% Down | Required Income |
|---|---|---|
| $800,000 | $160,000 | $150,000 |
| $1,000,000 | $200,000 | $192,000 |
| $1,250,000 | $250,000 | $240,000 |
| $1,500,000 | $300,000 | $288,000 |
*Income calculations assume 30-year amortization, 5.50% interest rate, $6,000/year property taxes, no other debt
Strategy for GTA Buyers: Consider exploring neighborhoods just outside the core (e.g., Oshawa, Burlington, Milton) where prices are lower and qualification is easier. Alternatively, look at condos which often qualify more easily due to lower price points.
The information in this guide is based on regulations from the following authoritative sources:
Note: Mortgage rules and rates are subject to change. Always consult with a licensed mortgage professional for the most current information and personalized advice.
Our mortgage experts can help you understand how these changes affect your home buying plans.