2026 Federal Budget: Mortgage & Housing Highlights
The Federal Government released its 2026 Budget on November 5, and it included more than 40 mortgage and housing-related measures that could significantly impact housing supply, financing, affordability, and population growth in Canada. This was all very welcomed news. Keep in mind that the initial Budget tables ideas that are on the table for 2026; however, firm details have not yet been announced.
For anyone involved in real estate, lending, development, or housing policy, there were several major announcements worth paying attention to. Here are the key highlights
1. A Major Immigration Change Could Increase Housing Demand
The government introduced new measures that could significantly increase permanent resident admissions without formally raising immigration targets. If implemented as proposed, Canada's population growth could be materially stronger than previous forecasts, creating additional long-term demand for housing across many markets.
2. Expanded Insurable Construction Financing
One of the most significant housing announcements was the expansion of insurable financing programs for residential construction and rental development. The budget proposes raising the home price limit for optional mortgage insurance (CMHC) from $1 million to $1.5 million, and allowing 30-year amortizations for these insurable mortgages where at least one borrower is a first-time homebuyer or the property is newly built. This could improve project economics for builders and developers, making thousands of previously marginal projects financially viable and helping accelerate new housing supply.
3. New Measures to Support Newly Built Homes
The budget includes several initiatives aimed at encouraging the purchase and development of newly constructed homes. The government is clearly attempting to increase both housing supply and demand simultaneously, with a particular focus on getting more homes built.
4. Mortgage Income Verification Crackdown
A long-awaited measure targeting mortgage fraud was also announced. The federal government plans to strengthen income verification processes, including enhanced access to income information through the Canada Revenue Agency (CRA).
5. Foreign Buyer Ban Changes
The government proposes extending the ban on foreign purchases of existing residential properties until January 1 , 2029, while allowing foreign buyers to purchase newly built residential properties. The stated objective is to preserve access to existing housing for Canadians while encouraging investment into new housing construction.
6. Greater Mortgage Transparency
The government announced plans to improve mortgage transparency by expanding the availability of insured mortgage rate information published by the Bank of Canada, consulting on clearer disclosure of mortgage prepayment penalties, and reviewing ways to help consumers better understand the costs associated with breaking a mortgage early. These changes could provide borrowers with more tools to compare mortgage options and make informed financing decisions.