Since 2008, we have seen the federal financial regulator change the Canadian mortgage rules six times. Now, for 2018, there is a seventh change – and it is putting pressure on many Canadian homeowners, as well as first-time buyers. If you are looking at getting or renewing a mortgage, here is everything you need to know about Canada’s 2018 mortgage rules.


What are the changes in Canada’s 2018 mortgage rules?

In the past, homeowners with a down payment of 20% or more did not have to go through a financial stress test to qualify for a mortgage.

Under Canada’s 2018 mortgage rules, though, anyone seeking to get or renew a mortgage with a bank – no matter their down payment – will have to qualify using the higher of:

  • the Bank of Canada’s five-year benchmark rate,
  • or your contractual mortgage rate plus 2%.

What this all boils down to is that instead of being able to prove that you can make your payments to get a mortgage, you now have to show that you can exceed your payments if your rate were to jump by at least 2%.


What do the changes in Canada’s 2018 mortgage rules mean for homebuyers and homeowners?

If the mortgages approved last year had been assessed under Canada’s 2018 mortgage rules, over 100,000 people would not have been approved.


First-time homebuyers and families are being hardest hit by the new rules.

Many are now unable to get a mortgage at a bank. Other homebuyers are being forced to purchase a lower priced smaller home in order to get a mortgage at a bank.

For those who are unable to receive a bank loan – or who do not want to compromise on a less expensive property – an alternative brokerage can provide another option.

Unlike a bank, an alternative brokerage is not required to assess a homebuyer or homeowner according to Canada’s 2018 mortgage rules, so can look at other factors when determining whether or not to approve a loan. This allows alternative brokerages to really see you and not just how you meet a set of standard regulations.

If you want to discuss how Canada’s 2018 mortgage rules affect you or how Freedom Capital’s alternative brokerage solutions can help you, drop us a line.