Overview
In 2025, CMHC (Canada Mortgage and Housing Corporation) introduced several major policy changes affecting mortgage insurance, housing affordability, and development financing across Canada. These reforms are among the most significant in decades and impact both individual homebuyers and developers.
Key 2025 CMHC Policy Changes
1. Increased Insured Mortgage Cap
- CMHC insured mortgage cap is increased from $1 million to $1.5 million effective December 15, 2024.
- This change allows buyers in expensive markets (Toronto, Vancouver, Montreal) to purchase homes up to $1.5 million with as little as a 5% down payment, expanding access to higher-priced properties.
| Region | Old Max Insurable Value | New Max Insurable Value |
|---|
| National | $1,052,631 | $1,578,947 |
| Toronto | $1,052,631 | $1,578,947 |
| Vancouver | $1,052,631 | $1,578,947 |
2. 30-Year Amortizations for First-Time Buyers
- First-time homebuyers and purchasers of new builds with insured mortgages can now access 30-year amortizations (up from 25 years).
- This extension applies to insured mortgages (down payment <20%), making monthly payments more affordable and supporting higher borrowing capacity.
3. Refinancing for Secondary Suites
- Starting January 15, 2025, homeowners can refinance insured mortgages to access equity for constructing secondary suites (e.g., basement apartments).
- This aims to promote urban densification and increase rental supply.
4. Changes to Multi-Unit Insurance and Development Financing
- Multi-Unit Loan Insurance Premiums: From July 14, 2025, a standardized approach applies, with premiums adjusted for risk factors like down payment size and new construction.
- Premium discounts for MLI Select borrowers who deliver affordability, accessibility, or energy efficiency in projects.
- Bundling Restrictions: Only buildings with five or more rental units on the same lot are eligible for MLI Select insurance; bundling adjacent single-family or semi-detached properties is no longer allowed, impacting investor financing models.
- Loan Cap for Developers: The insured mortgage cap for development projects has been raised from $1.39 million to $2.09 million, potentially supporting larger projects.
- Site Contamination Applications: CMHC now accepts construction financing applications for sites with known contamination, provided remediation is completed within six months.
5. Updated Qualification and Capital Rules
- Dual test for multi-unit applications: For terms over 10 years, qualification is based on the higher of market or contract rates.
- Mortgage Insurer Capital Adequacy Test (MICAT): CMHC now holds more capital in reserve, reflecting new federal regulatory guidelines.
6. Expanded Funding for Rental Construction
- Annual limit for Canada Mortgage Bonds increased from $55.73B to $83.60B to unlock low-cost financing for rental apartment development, potentially supporting up to 30,000 new rental units annually.
Market Impact
- Increased affordability for buyers in high-cost regions, but may contribute to further price appreciation as more buyers can access larger mortgages.
- More options for first-time buyers and families seeking newly built homes.
- Developers and investors face stricter insurance requirements for multi-unit projects, particularly for smaller projects and those relying on bundling strategies.
- Rental supply may increase, especially with incentives for secondary suites and expanded construction financing.
Provincial Considerations
- These changes are national but have greatest impact in high-cost provinces like Ontario and British Columbia, where home prices frequently exceed previous insured mortgage caps.
- Developers in Alberta and other provinces have expressed concern about the restriction on bundling, which may limit smaller rental project viability.
Actionable Next Steps
- For Homebuyers:
- Take advantage of the higher insured mortgage cap and 30-year amortization options, especially if you are a first-time buyer in a major city.
- For Homeowners:
- Consider refinancing to build a secondary suite and generate rental income.
- For Developers/Investors:
- Review eligibility for multi-unit insurance and adjust project structures to comply with the new bundling and premium rules.
- For All Canadians:
- Use a comprehensive mortgage rate comparison platform like theratefinder to access the best rates and lenders for your specific needs. Their multi-step application process connects you to top Canadian lenders for residential, commercial, and construction loans. Start your application at theratefinder.ca/onboarding for a personalized mortgage solution.
Summary
The 2025 CMHC policy changes make it easier for Canadians to purchase homes in expensive markets, support first-time buyers with longer amortizations, and encourage development of new rental supply. However, developers and investors must adapt to stricter multi-unit insurance rules and new premium structures. These reforms are designed to improve affordability and balance risk, but may have complex effects on prices and supply, especially in high-demand regions.