Navigating the New Mortgage Rules in Canada What Ontario Buyers Need to Know

Introduction

The mortgage rulebook in Canada just got a few key updates—and if you’re house-hunting in Ontario or looking to consolidate your debt, you need to know how to adjust your strategy. Whether you're a first-time buyer trying to get off the sidelines, or a family planning to make a smart financial move, this guide breaks down the most important rule changes already in play—and how they affect you.

As your local mortgage coach, I’ve read the playbook and am here to make the game plan simple. Let’s walk through the key rule changes that actually matter, so you can score your next big move with confidence.

1. Insured Mortgages Now Available Up to $1.5 Million

This is a major shift in the market. Previously, if your home purchase was over $1 million, you couldn’t get an insured mortgage. That meant you needed at least a 20% down payment—game over for a lot of families trying to move up in competitive Ontario markets.

But as of 2025, insured purchases are now allowed up to $1.5 million. That means:

✅ You can buy with as little as 5–10% down (depending on price point)
✅ You can qualify under more flexible insured lending guidelines
✅ You keep more of your cash for renos, debt consolidation, or savings

Example: Buying a $1.2M Home?

• You now only need $95,000 down (5% on first $500K + 10% on remaining $700K)

• Previously: You would’ve needed $240,000 (full 20%)

This opens the door for more Ontario buyers—especially in places like Brantford, Haldimand, Oxford, and Norfolk County, where price points are climbing, but still competitive compared to the GTA.

2. The Stress Test Adjustment: Who It Helps (And Who It Doesn’t)

There’s been a lot of buzz around changes to the mortgage stress test—but here’s the straight truth:

👉 It only impacts renewals that stay with the same lender
👉 It does NOT apply to new purchases or buyers switching lenders

So if you're shopping for your first home or looking to refinance for better rates or consolidate debt, you’re still being stress tested at the higher of the benchmark rate or your contract rate + 2%.

Yes, that makes qualifying tougher—but that’s why it’s more important than ever to work with a mortgage pro who knows how to maximize your approval.

📣 Bottom line: If you're buying, you're still facing the same qualifying hurdles—no change there. But we can build a strategy to help you qualify smartly.

New Mortgage Rules in Canada

3. Using RRSPs and FHSAs to Build a Winning Down Payment Strategy

If you’re like many of my clients, saving a down payment feels like trying to score on a breakaway with a broken stick. But here's how the RRSP Home Buyers’ Plan and the new First Home Savings Account (FHSA) can give you the gear you need to win:

RRSP Home Buyers’ Plan (HBP)

• Withdraw up to $35,000 per person tax-free (that’s $70K for a couple)

• Must repay over 15 years

• Great option if you’ve been contributing steadily to your RRSP

First Home Savings Account (FHSA)

• Contribute up to $8,000 per year (to a $40K lifetime limit)

• Get a tax deduction AND withdraw it tax-free when you buy

• Can be used alongside the RRSP HBP for even more flexibility

🎯 Playbook Tip: I help buyers stack these tools to build a stronger, faster down payment game—without draining their cash flow.

Let’s Build Your Mortgage Game Plan

New rules can create confusion—but also opportunity. The key is knowing how to adjust your mortgage strategy to the current play. That’s where I come in.

Whether you're trying to get into your first home, upgrade, or finally consolidate some debt, we’ll build a mortgage game plan that fits your goals—and your life.

📞 Book your free 30-minute strategy call
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FAQs: New Mortgage Rules in 2025

1. Does the new $1.5M insured mortgage cap mean I can buy a $1.4M home with 5% down?

Not quite. You still need 5% on the first $500K, 10% on the rest—but yes, you can now buy with less than 20% down up to $1.5M.

2. Has the stress test been eliminated?

No. It’s still required for purchases and lender switches. Only same-lender renewals are exempt.

3. Can I use both the RRSP HBP and FHSA together?

Yes! And that combo can dramatically improve your affordability and reduce your upfront tax bill.

4. Do I need to repay the FHSA?

Nope. It’s fully tax-free going in and coming out—if used to buy your first home.

5. Should I wait until more rule changes happen?

Not necessarily. These three rules are already in place, and the current rate window could shift quickly. Best to review your options now.

🏒 Final Whistle: New Rules, New Playbook

The mortgage world’s always changing—but with the right strategy and guidance, you can still win big. Let’s put together your custom game plan and make these new rules work for you—not against you.