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Announced in Budget 2026, checked 10 November 2026. Finance Canada published the rules on 5 November 2026. They apply to insurance applications that lenders send to insurers on or after 1 February 2027. This is mortgage finance, not a tax change, and the page covers it because home buyers and small builders ask about it next to the tax pages.
Everything below comes from the Finance Canada backgrounder and Budget 2026 chapter 3. Lenders and insurers set their own products, so ask them what they will offer.
What changes on February 1, 2027?
Two groups of properties get new insured financing. The first is newly built homes with three or four units. The second is buildings with five to fifty self-contained units, which private mortgage insurers may now insure. Finance Canada says the measures are available for applications that lenders submit to insurers on or after February 1, 2027.
Budget 2026 describes them as part of a plan to unlock financing for "missing middle" homes. Finance Canada's backgrounder says the government is publishing the parameters for lenders and insurers to begin offering these products. It does not call the measures proposed, and it does not say that they are written into law, so treat the details as published rules that lenders and insurers still have to put into practice.
What are the rules for new three- and four-unit homes?
The rules cover construction of a new three- or four-unit property and the purchase of one that has just been built.
| Item | Published rule |
|---|---|
| Maximum loan to value | 90% of the projected value at completion |
| Maximum amortization | 30 years |
| Property value cap | None |
| Owner occupancy | Not required |
| Debt service limits | GDS 39% and TDS 44%, with the minimum qualification rate |
| Credit score | At least one borrower or guarantor at 600 or higher |
For construction financing, no amortization or debt service limit applies. Insurers use their own underwriting criteria instead.
Budget 2026 gives an example. A builder plans a $3 million fourplex. Under the current rules it would not qualify, because its value is above the $1.5 million cap and the builder would have to live in one unit. Under the new rules the builder could get a loan of up to 90% of the property's value with no maximum value and no need to live there, and then keep the fourplex as a rental with an insured mortgage amortized over up to 30 years.
What are the rules for five- to fifty-unit buildings?
The building must have between five and fifty self-contained dwelling units, each with cooking, sleeping and bathroom facilities. It must be held under a single legal title or ownership structure. Several separately titled properties cannot be bundled to reach the unit count.
| Item | New construction | Other transactions |
|---|---|---|
| Maximum loan to property value | 90% | 85% |
| Maximum amortization | 50 years | 40 years |
| Permitted uses | Construction, purchase, refinance and renewal | |
| Property value cap | None | |
| Owner occupancy | Not required | |
The minimum debt coverage ratio is 1.15 for five-year terms and 1.1 for ten-year terms. The borrower needs a net worth of at least 25% of the loan amount, with a minimum of $100,000, based on assets held in Canada. As with the smaller buildings, construction financing has no amortization or coverage ratio requirement.
Does this change anyone's taxes?
Not directly. The insurance rules decide how much a lender can lend and on what terms. Taxes still apply as before. Rent from a new fourplex is taxed as rental income, and a sale can trigger GST/HST on new housing or land transfer tax, depending on the province. Our rental income tax guide and home buying costs and taxes page cover those parts.
One related tax item is the end of the foreign buyer ban on 1 January 2027, covered in Foreign Buyer Ban in Canada 2027.
What should you check before planning around this?
Insurers and lenders decide when and how to offer the products, and underwriting can be stricter than the published ceilings. Nothing here is available before February 1, 2027. If you are weighing a build or a purchase, ask your lender in writing which of these parameters it will use. For the payment side of an ordinary mortgage, see Mortgage Terms in Plain Words and the stress test guide.
How is this page kept current?
We re-read the Finance Canada page when lenders or insurers publish their products, and we change the figures only if the official text changes. The wider list of 2027 items is on Canadian Taxes in 2027.
This is an independent information site. It provides no services, does not represent the CRA, the Department of Finance or any organization, and collects information from open sources. It does not guarantee that anything here is accurate or current, and it accepts no liability for how you use it. It is not mortgage advice. Check the official pages and your lender before you rely on a figure.
Frequently asked questions
When do the new mortgage insurance rules start?
Finance Canada says they apply to insurance applications that lenders submit to insurers on or after February 1, 2027.
Can I get an insured mortgage on a fourplex in 2027?
For a newly built three- or four-unit property, yes under the published rules: up to 90% of the value at completion, up to 30 years, no value cap and no need to live there. Lenders and insurers decide the details.
Did the $1.5 million cap on insured mortgages change?
Budget 2026 treats $1.5 million as the current cap. For new three- and four-unit homes the published rules set no maximum value.
Who can insure a building with five to fifty units?
Finance Canada says private mortgage insurers may offer multi-unit mortgage loan insurance.