Canada sets insured mortgage changes for multi-unit housing from February 2027

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Canada insured mortgage changes 2027

Highlights

Effective February 2027, Canada will allow private mortgage insurers to insure multi-unit properties with broadened product flexibility following the Spring Economic Update 2026.
For five to 50-unit properties, the maximum loan-to-value is 90 per cent for new construction and 85 per cent for others, with up to 50-year amortization for new builds.
For new three and four-unit housing, insured mortgages allow up to 90 per cent loan-to-value, 30-year amortization, no owner-occupancy or property value limits, and strict debt and credit ratio requirements.

New insured financing parameters

As reported by Government of Canada, the new parameters follow the Spring Economic Update 2026, when Ottawa said it would amend mortgage insurance rules to allow private mortgage insurers to provide multi-unit mortgage loan insurance and broaden product flexibility for borrowers building new three and four-unit housing.

For multi-unit residential properties with five to 50 units, permitted loan uses include construction, purchase, refinance and renewal. The maximum loan-to-property value is set at 90 per cent for new construction and 85 per cent for other transactions, while maximum amortization reaches 50 years for new construction and 40 years for other transactions.

The framework sets a minimum debt coverage ratio of 1.15 for five-year mortgage terms and 1.1 for 10-year mortgage terms. It also removes any maximum property value limit and owner-occupancy requirement, while requiring borrowers to hold net worth in Canada equal to at least 25 per cent of the requested loan amount, with a minimum of $100,000.

For new three and four-unit housing, insured financing applies to construction and purchase of newly built eligible properties. The maximum loan to projected property value on completion is 90 per cent, with no owner-occupancy requirement or property value cap, a maximum 30-year amortization, a maximum gross debt service ratio of 39 per cent and a maximum total debt service ratio of 44 per cent, alongside the minimum qualification rate.

At least one borrower or guarantor must have a credit score of 600 or higher at loan approval. For construction financing under both streams, insurers set their own underwriting criteria because maximum amortization and debt servicing rules do not apply at that stage.

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