The federal government tabled Budget 2026 on November 5, 2026. Its affordability chapter proposes changes to mortgage insurance, new tools for comparing mortgage rates and a longer ban on foreign purchases of existing homes, according to Chapter 3 of the budget. Most of the mortgage measures are proposals that still need regulations or legislation; only the multi-unit insurance changes have a stated start date.
- Optional mortgage insurance: the home price limit would rise from $1 million to $1.5 million, and 30-year amortizations would be permitted when at least one borrower is a first-time buyer or the home is newly built. No start date was given.
- "Missing middle" homes: new insurance flexibilities for three- and four-unit homes, and private insurers allowed to insure five- to fifty-unit properties, taking effect February 1, 2027.
- The Bank of Canada would publish more detailed information on insured mortgage rates under proposed regulations.
- A Canada Revenue Agency income verification service for lenders and insurers, with $13 million over three years starting in 2027-28.
- The ban on foreign purchases of existing homes would be extended two years, to January 1, 2029, with new residential properties exempted.
What changes for buyers with 20% or more down
Under OSFI's Guideline B-20, federally regulated lenders must insure purchase loans with a loan-to-value ratio above 80%. Loans at or below 80% can be insured, but it is not required, which is why the budget calls it optional mortgage insurance. Budget 2026 proposes to raise the price ceiling for that optional insurance to $1.5 million and to allow 30-year amortizations on these insured mortgages for first-time buyers and buyers of new homes.
Our interpretation: lenders often price insured mortgages differently from uninsured ones because the insurer backs the loan. A higher ceiling could widen competition for mortgages on homes between $1 million and $1.5 million, but any effect on rates offered depends on the final rules and on each lender.
Multi-unit homes and small builders
The budget confirms the missing-middle changes first set out in the Spring Economic Update 2026, effective February 1, 2027. Its own example is a builder planning a $3 million fourplex: under current rules the project would not qualify because it exceeds the $1.5 million cap and requires the owner to live in one unit. Under the proposal, a newly built three- or four-unit property could get insured construction financing for up to 90% of its value, with no maximum property value and no occupancy requirement, then an insured mortgage amortized over up to 30 years once complete.
Shopping for a mortgage
Three proposals aim at transparency: Bank of Canada publication of insured mortgage rate data, the CRA income verification service (intended to speed applications and deter fraud), and a consultation on making prepayment penalties on insured mortgages easier to compare. Chapter 1 also proposes raising the deposit insurance limit to $250,000 and adding temporary high-balance coverage for life events such as the sale of a home.
Who is affected and what to do next
Buyers with at least 20% down in the $1 million to $1.5 million range, especially first-time buyers and buyers of new homes, are the main group affected, but nothing changes until the rules are finalized. If you are buying now, qualify under today's rules and ask your lender whether your file would be insured or uninsured. Small builders weighing a triplex or fourplex can plan around the February 2027 date. To compare scenarios, use the mortgage insurance calculator, or talk to one of the mortgage brokers listed on the site about how the proposals could apply to your purchase.
Sources
- Department of Finance Canada, Budget 2026, Chapter 3: A more affordable life, 2026-11-05. Accessed 2026-11-10.
- Department of Finance Canada, Budget 2026, Chapter 1: Canada's Investment Supercycle, 2026-11-05. Accessed 2026-11-10.
- Office of the Superintendent of Financial Institutions, Residential Mortgage Underwriting Practices and Procedures (Guideline B-20), 2017-10-31. Accessed 2026-11-10.
General information only, not financial or legal advice. Budget measures are proposals until enacted and may change. Mortgage Directory does not verify or endorse listed professionals.
