The government introduced several amendments to the Eligible Mortgage Loan Regulations and the Insurable Housing Loan Regulations. These regulatory amendments were made pursuant to the Protection of Residential Mortgage or Hypothecary Insurance Act (PRMHIA) and the National Housing Act (NHA).

One of the key amendments involved setting a new minimum qualifying rate (MQR) for insured mortgages. The MQR, which is the greater of the borrower’s contract rate plus 2 percent or a floor rate of 5.25 percent, ensures borrowers are financially prepared for potential interest rate increases and other unexpected expenses.

Another significant change was the introduction of 30-year amortization periods for insured mortgages for first-time homebuyers purchasing newly built homes, effective August 1, 2024. This measure aimed to make homeownership more accessible by lowering monthly mortgage payments. The policy was later expanded to allow 30-year amortizations for all first-time homebuyers and all purchasers of newly built homes, effective December 15, 2024.

Additionally, the amendments raised the home price limit for high-ratio insured mortgages from $1 million to $1.5 million, effective December 15, 2024. This change was implemented to reflect current housing market conditions, particularly in regions where median home prices exceed $1 million, making it easier for Canadians to secure financing with lower down payments. Borrowers must still adhere to the down payment structure, requiring 5 percent on the first $500,000 and 10 percent on amounts between $500,000 and $1.5 million.

To further address housing supply challenges, new rules were introduced to allow homeowners to refinance their insured mortgages for the purpose of adding secondary suites. This change was aimed at increasing housing density by facilitating the construction of additional self-contained units such as basement apartments and laneway homes. The home’s post-improvement value must remain under $2 million, and the maximum loan-to-value ratio, including improvements, is set at 90 percent.

Another significant regulatory update involved removing the MQR requirement for uninsured mortgage holders switching lenders. This change allows borrowers with low-ratio mortgages (loan-to-value ratios up to 80 percent) to move their mortgages between lenders without having to requalify under the MQR, provided they meet specific conditions. These include maintaining the original amortization schedule and ensuring no equity is taken out during the transfer, although borrowers may increase their loan amount by up to $3,000 to cover switching costs.

The combination of higher home price limits, extended amortization periods, and more flexible refinancing options is expected to improve affordability while mitigating risks associated with excessive household debt.

Canada (SOR/2025-55) March 12, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion.