Are There More Mortgage Rule Changes Coming?

Marci • June 27, 2017

Recently, the Bank of Canada released its semi-annual Financial Systems Review  (PDF document), which identifies some of the major risks that the Bank foresees on the economic horizon.

Unsurprisingly, the Bank pinpoints increased levels of Canadian household debt and rapidly increasing prices in Toronto and Vancouver as vulnerabilities to the financial system. The good news is that, despite these vulnerabilities increasing over the past six months, the Bank of Canada is confident that the financial system remains resilient, and that overall, national economic conditions continue to improve. This positive outlook, combined with strong economic growth, are playing a role in the not-so-subtle hint that the Bank may increase interest rates sooner rather than later.

So what does this policy review indicate for future federal interventions in the mortgage market? The short answer is a lot.

It is no coincidence that the aforementioned vulnerabilities mirror the rationale used by the federal government for the mortgage insurance and eligibility changes in October. The Bank of Canada, the Department of Finance and CMHC are all aligned and focused on curbing elevated levels of household debt and ensuring the stability of the housing sector. This report could be viewed as representative of the problems and policies that the finance department is considering.

It is no surprise then that the Bank of Canada is pleased with the impact that the October changes have had on the debt-to-income ratios of insured mortgages (chart 3). But, the changes have also had an impact on increasing the market share of new mortgages that are uninsured. Clearly, this was an intended impact of the federal government’s changes and now the Bank of Canada is identifying the uninsured space as the next place to consider in terms of whether action is needed.

The Bank’s concerns will likely find a supportive audience at the Ministry of Finance and at CMHC. The data showing the increasing debt-to-income ratios for the uninsured sector (table 1) could trigger an investigation into additional regulation in the uninsured space by the Ministry of Finance or OSFI.

The first measure that is likely being considered is related to Home Equity Lines of Credit (HELOCs). This is clear for two reasons. First, because the Bank of Canada believes that the greater use of HELOCs could also be contributing to increasing household indebtedness. According to the Bank, HELOCs have increased at rates above income growth since early 2016, and have accounted for approximately 10 per cent of total outstanding household credit in recent quarters. Second, the Financial Consumer Agency of Canada recently released a report raising concerns that HELOCs may be putting some Canadians at risk of over borrowing. The timing of this report and the Financial Systems Review may not be coincidental.

It seems OSFI may be considering making changes to its B-20 underwriting guidelines ; the Bank of Canada’s report suggests that OSFI will begin a public consultation shortly.

The critical policy question that the Department of Finance could be considering is whether to extend the stress test for insured mortgages to uninsured mortgages as well. This could create a more even playing field for lenders who originate a greater percentage of insured mortgages and could possibly have an impact in cooling the markets of Toronto and Vancouver. However, it could also negatively impact the rest of the Canadian housing market, which is not suffering from the same vulnerabilities of Toronto and Vancouver and could become unnecessary if the Bank of Canada raises interest rates.

Finally, there was a small policy section in the review that few may have paid much attention to but is important and provides some very helpful insights into the future of Canada’s private mortgage securitization market. The Bank of Canada recognizes that the recent changes have negatively impacted mortgage lenders that rely on portfolio insurance and that the increased growth in uninsured mortgages have created an opportunity for private residential mortgage-backed securities. The Bank of Canada goes even further and suggests that “properly structured private securitization would benefit the financial system by helping lenders fund loans.” (page 13).

It is surprising that this issue hasn’t received more attention because the Bank of Canada is tacitly endorsing a significant policy shift away from CMHC-backed mortgage securities to a private sector mortgage securitization market. This confirms that the creation of this market is an intended impact from the federal government’s changes to portfolio insurance and aligns with CMHC President Evan Siddall’s testimony to the finance committee on the changes to portfolio insurance.

Until the Bank of Canada is convinced that the housing sector no longer poses the greatest liability to the Canadian economy, Canadians will continue to see the federal government scrutinize mortgage activity in Canada with an eye to reduce the increasing levels of household debt in the country..

Let’s hope the government shifts their focus to unsecured household debt instead of further secured debt restrictions. However, if the Bank of Canada’s review is representative of the Ministry of Finance’s considerations, watch out for changes to HELOCs, through B-20 changes, the stress test being applied to uninsured mortgages and continued growth in the developing private sector mortgage securitization market.

 

This article originally appeared on Canadian Mortgage Trends, a publication of Mortgage Professionals Canada on June 20th 2017. It was written by the manager of government and policy for Mortgage Professionals Canada, Samuel Duncan. 

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How to Access Your Home Equity Wisely

By Marci Deane • April 1, 2026
Need to Free Up Some Cash? Your Home Equity Could Help If you've owned your home for a while, chances are it’s gone up in value. That increase—paired with what you’ve already paid down—is called home equity, and it’s one of the biggest financial advantages of owning property. Still, many Canadians don’t realize they can tap into that equity to improve their financial flexibility, fund major expenses, or support life goals—all without selling their home. Let’s break down what home equity is and how you might be able to use it to your advantage. First, What Is Home Equity? Home equity is the difference between what your home is worth and what you still owe on it. Example: If your home is valued at $700,000 and you owe $200,000 on your mortgage, you have $500,000 in equity . That’s real financial power—and depending on your situation, there are a few smart ways to access it. Option 1: Refinance Your Mortgage A traditional mortgage refinance is one of the most common ways to tap into your home’s equity. If you qualify, you can borrow up to 80% of your home’s appraised value , minus what you still owe. Example: Your home is worth $600,000 You owe $350,000 You can refinance up to $480,000 (80% of $600K) That gives you access to $130,000 in equity You’ll pay off your existing mortgage and take the difference as a lump sum, which you can use however you choose—renovations, investments, debt consolidation, or even a well-earned vacation. Even if your mortgage is fully paid off, you can still refinance and borrow against your home’s value. Option 2: Consider a Reverse Mortgage (Ages 55+) If you're 55 or older, a reverse mortgage could be a flexible way to access tax-free cash from your home—without needing to make monthly payments. You keep full ownership of your home, and the loan only becomes repayable when you sell, move out, or pass away. While you won’t be able to borrow as much as a conventional refinance (the exact amount depends on your age and property value), this option offers freedom and peace of mind—especially for retirees who are equity-rich but cash-flow tight. Reverse mortgage rates are typically a bit higher than traditional mortgages, but you won’t need to pass income or credit checks to qualify. Option 3: Open a Home Equity Line of Credit (HELOC) Think of a HELOC as a reusable credit line backed by your home. You get approved for a set amount, and only pay interest on what you actually use. Need $10,000 for a new roof? Use the line. Don’t need anything for six months? No payments required. HELOCs offer flexibility and low interest rates compared to personal loans or credit cards. But they can be harder to qualify for and typically require strong credit, stable income, and a solid debt ratio. Option 4: Get a Second Mortgage Let’s say you’re mid-term on your current mortgage and breaking it would mean hefty penalties. A second mortgage could be a temporary solution. It allows you to borrow a lump sum against your home’s equity, without touching your existing mortgage. Second mortgages usually come with higher interest rates and shorter terms, so they’re best suited for short-term needs like bridging a gap, paying off urgent debt, or funding a one-time project. So, What’s Right for You? There’s no one-size-fits-all solution. The right option depends on your financial goals, your current mortgage, your credit, and how much equity you have available. We’re here to walk you through your choices and help you find a strategy that works best for your situation. Ready to explore your options? Let’s talk about how your home’s equity could be working harder for you. No pressure, no obligation—just solid advice.

Smart Strategies to Save for Your Down Payment

By Marci Deane • March 25, 2026
How to Start Saving for a Down Payment (Without Overhauling Your Life) Let’s face it—saving money isn’t always easy. Life is expensive, and setting aside extra cash takes discipline and a clear plan. Whether your goal is to buy your first home or make a move to something new, building up a down payment is one of the biggest financial hurdles. The good news? You don’t have to do it alone—and it might be simpler than you think. Step 1: Know Your Numbers Before you can start saving, you need to know where you stand. That means getting clear on two things: how much money you bring in and how much of it is going out. Figure out your monthly income. Use your net (after-tax) income, not your gross. If you’re self-employed or your income fluctuates, take an average over the last few months. Don’t forget to include occasional income like tax returns, bonuses, or government benefits. Track your spending. Go through your last 2–3 months of bank and credit card statements. List out your regular bills (rent, phone, groceries), then your extras (dining out, subscriptions, impulse buys). You might be surprised where your money’s going. This part isn’t always fun—but it’s empowering. You can’t change what you don’t see. Step 2: Create a Plan That Works for You Once you have the full picture, it’s time to make a plan. The basic formula for saving is simple: Spend less than you earn. Save the difference. But in real life, it’s more about small adjustments than major sacrifices. Cut what doesn’t matter. Cancel unused subscriptions or set a dining-out limit. Automate your savings. Set up a separate “down payment” account and auto-transfer money on payday—even if it’s just $50. Find ways to boost your income. Can you pick up a side job, sell unused stuff, or ask for a raise? Consistency matters more than big chunks. Start small and build momentum. Step 3: Think Bigger Than Just Saving A lot of people assume saving for a down payment is the first—and only—step toward buying a home. But there’s more to it. When you apply for a mortgage, lenders look at: Your income Your debt Your credit score Your down payment That means even while you’re saving, you can (and should) be doing things like: Building your credit score Paying down high-interest debt Gathering documents for pre-approval That’s where we come in. Step 4: Get Advice Early Saving up for a home doesn’t have to be a solo mission. In fact, talking to a mortgage professional early in the process can help you avoid missteps and reach your goal faster. We can: Help you calculate how much you actually need to save Offer tips to strengthen your application while you save Explore alternate down payment options (like gifts or programs for first-time buyers) Build a step-by-step plan to get you mortgage-ready Ready to get serious about buying a home? We’d love to help you build a plan that fits your life—and your goals. Reach out anytime for a no-pressure conversation.

Bank of Canada Holds Rate at 2.25% — March 18, 2026

By Marci Deane • March 18, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. For anyone watching the mortgage market — whether you're renewing, purchasing, or simply keeping an eye on borrowing costs — here's a breakdown of what was announced and what it may mean for you.