How Canadian Mortgage Rules Work in 2026

Canada's mortgage rules are stricter than many countries, but they're designed to protect both borrowers and the broader financial system. Understanding them upfront saves you from surprises at the lender's desk.

The mortgage stress test requires that you qualify at the higher of your contract rate plus 2%, or 5.25%. So if your lender offers you 4.5%, you must prove you could still afford payments at 6.5%. This reduces your maximum purchase price by roughly 18–20% compared to what your actual payment would suggest.

Down payment minimums depend on purchase price. Homes under $500,000 require 5% down. Between $500,000 and $999,999, it's 5% on the first $500k plus 10% on the remainder. At $1 million and above, you need 20% down — no exceptions. In Vancouver, that means most detached home purchases require at least $200,000 cash.

If your down payment is less than 20%, your mortgage must be insured through CMHC (or Sagen/Canada Guaranty). The premium ranges from 0.60% to 4.00% of the mortgage amount, added to your mortgage balance. On a $700,000 home with 5% down, the CMHC premium would be $26,600 — added to your mortgage, not paid out of pocket at closing.

Amortisation is capped at 25 years for insured mortgages (down payment < 20%), or 30 years for conventional mortgages. A longer amortisation lowers your monthly payment but increases total interest paid. Use our mortgage calculator to model your exact scenario.