Budget 2026 and your mortgage: 10 things in plain words
Canada's federal budget was tabled on November 6, 2026. This page explains the parts that touch mortgages and homes, in plain words. Most of it is not law yet — the "When" column tells you which is which.
The budget has a lot in it about homes. Most news stories made it sound complicated. Here are the ten things that actually matter if you own a home, want to buy one, or have a mortgage — written so anyone can follow them.
Read this first. Two of the biggest changes — the $1.5 million limit and the 30-year loan — are proposals. The government says it wants to do them. There is no start date yet, and they are not law. Do not plan a purchase around them until they are real. I will update this page when that changes.
The ten things, and when each one starts
| # | What it is | When |
|---|---|---|
| 1 | A wider group could get insured pricing on homes up to $1.5 million Careful here, because this is widely reported wrong. If you have less than 20% down, the $1.5 million limit already applies and has since December 15, 2024. What the budget proposes is raising the limit for “optional” mortgage insurance — a different, lender-side category — also to $1.5 million. | Proposed. No start date. The limit for mandatory insurance is already $1.5M. |
| 2 | 30-year amortizations on those optional-insurance mortgages Also widely reported as new. If you are a first-time buyer, or buying a newly built home, the 30-year option has been available since December 15, 2024. The budget would extend it to the optional-insurance category. | Proposed. Already available to first-time buyers and new-build buyers. |
| 3 | The tax office could confirm your income for you Today you dig up pay stubs and tax papers. The budget would let the Canada Revenue Agency confirm your income straight to your lender. The government is putting $13 million over three years behind it, starting in 2027–28. | Proposed. Testing starts 2027–28. |
| 4 | The Bank of Canada would publish what people are really paying Right now it is hard to know if the rate you were offered is a good one. The Bank of Canada would publish better information on insured mortgage rates so you can compare. | Announced. Being developed. |
| 5 | The government will look at penalty fees for breaking a mortgage If you end a mortgage early you pay a penalty, and the way it is worked out is often confusing. The government says it will consult on making those penalties clearer on insured mortgages. | Consultation only. Nothing changes yet. |
| 6 | Banks would have to send you one yearly list of your fees One clear statement a year showing every account fee you were charged. The UK and Europe already do this. | Announced. Rules to be written. |
| 7 | Buying a small rental building gets easier For brand-new homes with three or four units: no maximum price, you will not have to live in one of the units, you can borrow up to 90% of the value, and you can take 30 years to pay it off. | Starts February 1, 2027. |
| 8 | Bigger apartment buildings too, from 5 to 50 units Private mortgage insurers would be allowed to insure loans on buildings of this size, which makes them easier to finance. | Starts February 1, 2027. |
| 9 | The ban on foreign buyers is extended People who are not Canadian still cannot buy an existing home here. That ban now runs to January 1, 2029. Newly built homes are not covered by the ban. | Proposed. Law to be introduced. |
| 10 | More homes are supposed to get built An extra $13 billion over ten years for Build Canada Homes, aiming at 200,000 new homes, bringing its total to $45 billion. Plus $1.5 billion to get water, sewers and roads ready on federal land. | Proposed. Money starts 2027–28 and 2028–29. |
The part almost every story got wrong
A correction, and it matters. When this budget landed, a lot of coverage — and the first version of this page — said the $1.5 million limit and the 30-year mortgage were new. They are not. Both have been the rule since December 15, 2024. If you have less than 20% down, you can already buy up to $1.5 million. If you are a first-time buyer or buying a newly built home, you can already take 30 years.
What the budget actually proposes is the same two numbers for a different category called “optional” mortgage insurance. I will explain that below, including the part I cannot yet tell you.
What the rules already are, today
There is a line at $1.5 million. Below it, if you have less than 20% down, your mortgage can be insured and the minimum is 5% of the first $500,000 plus 10% of the rest. Above it, no insurance, so you need 20%.
| Home price | Minimum down payment today | How it is worked out |
|---|---|---|
| $500,000 | $25,000 | 5% of the first $500,000 |
| $1,000,000 | $75,000 | 5% on $500,000 + 10% on $500,000 |
| $1,200,000 | $95,000 | 5% on $500,000 + 10% on $700,000 |
| $1,500,000 | $125,000 | 5% on $500,000 + 10% on $1,000,000 |
| $1,600,000 | $320,000 | above the cap — 20% required |
So if you were told you need $240,000 to buy a $1.2 million home, that has not been true for nearly two years. You need $95,000. That is the single most useful thing on this page, and it has nothing to do with the new budget.
So what is the budget actually changing?
There are two kinds of mortgage insurance in Canada. The one most people meet is mandatory — you must have it when your down payment is under 20%. That is the one already capped at $1.5 million.
The other is optional insurance, which a lender can choose to take out on a mortgage where the borrower has 20% or more down. The borrower usually never sees it. Its limit is still $1 million, and the budget proposes raising it to $1.5 million and allowing 30 years on it.
Here is the honest limit of what I can tell you. The budget gives the numbers but not the detailed rules, and it has no start date. Exactly who benefits, and by how much, depends on regulations that have not been written yet. Anyone telling you today what this will do to your specific purchase is guessing. When the rules are published I will update this page and say plainly who it helps.
The 30-year loan: both things are true
The 30-year option already exists for first-time buyers and for anyone buying a newly built home, and has since December 15, 2024. The budget would extend it into the optional-insurance category. Either way, the trade-off below is the thing worth understanding, and almost every story led with only half of it.
On a $900,000 mortgage at 4.59%:
- Over 25 years the payment is about $5,026 a month.
- Over 30 years it is about $4,585 a month — $441 less.
- But you pay about $142,750 more interest over the life of the loan.
Neither number is a trick. The lower payment is real and for some families it is the thing that makes a house possible at all. The extra interest is also real. Anyone selling you only one of those two numbers is not giving you the full story.
One thing that helps: you can take the 30 years to qualify, then pay extra when you are able. Most mortgages let you prepay some amount each year without a penalty. That turns a 30-year loan back into something shorter at your own pace.
What this does not change
Being straight with you, because this is where people get the wrong idea:
- It does not lower your interest rate. Nothing in the budget sets mortgage rates. Fixed rates follow Government of Canada bond yields. Variable rates follow your lender's prime, which follows the Bank of Canada. The Bank raised its rate on October 28 and prime went to 4.70%.
- It does not change the stress test. You still have to qualify at the greater of your rate plus 2% or 5.25%.
- It does not build houses this year. The building money starts in 2027–28 and 2028–29. Ontario housing starts have fallen two years running, and a budget line does not change that quickly. The supply numbers are here.
- Most of it is not law yet — and two of the headline items are not new. Four items are proposals with no date, one is only a consultation, and the $1.5 million limit and 30-year option already exist for mortgages with less than 20% down.
What to actually do about it
- If you are saving for a home between $1 million and $1.5 million: check your numbers again. If you have less than 20% down you may already qualify, and may have for nearly two years. A $1.2 million home needs $95,000, not $240,000.
- If you are buying a brand-new home or buying your first: ask about the 30-year amortization now. It is already available to you, not something to wait for.
- If you are thinking about a small rental building: the three-and-four-unit rules have a real date, February 1, 2027. That one you can plan around.
- If you are renewing: nothing here helps you today. What matters is the rate you can get now, and whether shopping beats the letter your lender sent.
Want to know what any of this means for your situation?
I will tell you plainly which of these would apply to you, which would not, and what your numbers look like today — not after a rule that may or may not arrive. No cost, no pressure.
Garry Sidhu · Mortgage Broker, Licence #M21004814
Akal Mortgages Inc., FSRA #10845
Sources. All measures from the Government of Canada's Budget 2026, tabled November 6, 2026, Chapter 3 ("A more affordable life") at budget.canada.ca. Status and dates are as stated in that chapter: the $1.5 million insured price limit and the 30-year amortization expansion are described as proposals with no effective date given; the three-and-four-unit and five-to-fifty-unit financing changes are stated to come into effect February 1, 2027; the foreign buyer ban extension runs to January 1, 2029 and exempts new residential properties. Down payment figures calculated on the insured minimums in force since December 15, 2024 (5% of the first $500,000, 10% of the portion above, 20% above the $1.5 million cap), per the Department of Finance Canada announcement of September 2024, “Delivering the Boldest Mortgage Reforms in Decades”. The December 15, 2024 changes raised the mandatory high-ratio insurance cap from $1 million to $1.5 million and extended 30-year amortizations to all first-time buyers and all buyers of new builds; Budget 2026 proposes the equivalent limits for optional (lender-side) insurance, with no effective date given. Payment figures calculated with Canadian semi-annual compounding at 4.59%, the lowest five-year fixed on my lender sheet effective November 10, 2026. Prime rate 4.70% as of October 29, 2026. Figures are illustrative, not an offer or an approval. O.A.C. This is general information, not financial or tax advice.
Frequently asked questions
What does Budget 2026 do for mortgages in Canada?
Is the $1.5 million mortgage insurance limit already in effect?
How much less down payment would the $1.5 million limit mean?
Who would qualify for a 30-year amortization under Budget 2026?
Does Budget 2026 lower mortgage rates?
What changes on February 1, 2027?
Is the foreign buyer ban still in place?
Does Budget 2026 change the mortgage stress test?
When does the new housing money actually build homes?
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