Banks, Builders Urge Ottawa to Ease Mortgage Rules
Major lenders and homebuilders want looser financing rules and larger down payment help for first-time buyers of new homes.
Updated on Nov. 10, 2026 in Residential
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Canada's largest banks and developers urged Ottawa to relax mortgage rules and expand down payment assistance for first-time buyers of new homes. The recommendations came in a National Housing and Investment Initiative report released on Tuesday, November 10, 2026.
Why it matters
The report argues that the mortgage stress test and limited federal financing are constraining homebuilding at a time when housing starts are needed. Easier access to financing for new homes could shape how many units get built across Canada.
The mortgage stress test requires buyers to qualify at a rate 200 basis points above their mortgage rate, while Toronto-region developers typically need to presell at least 70 per cent of a project's units to qualify for construction financing. Whether Ottawa will act on the 29 recommendations remains unclear.
The players
Building Industry and Land Development Association
An industry group representing Canadian homebuilders and land developers that co-compiled the report advocating for changes to federal housing financing rules.
The Missing Middle Initiative
A housing policy group that co-compiled the report focused on increasing supply of medium-density housing in Canadian cities.
BMO
Bank of Montreal, one of Canada's largest banks, which endorsed the report's recommendations on mortgage rules and first-time buyer financing.
The details
The National Housing and Investment Initiative report, compiled by the Building Industry and Land Development Association and The Missing Middle Initiative, was endorsed by RBC, CIBC, BMO, TD Bank and Bank of Nova Scotia and backed by 10 large homebuilders including Minto Group and Polygon Homes. It proposes a sliding stress test based on mortgage term and buyer type, easier qualification for first-time buyers of new homes, and allowing buyers to deduct mortgage interest from taxable income.
Timeline
Home prices and rental rates have declined over the past four years.
The National Housing and Investment Initiative report was released on Tuesday, November 10, 2026.
Market Landscape
The report targets the federal mortgage stress test, which requires borrowers to qualify 200 basis points above their mortgage rate, arguing it has reduced the amount of new housing built. It proposes a sliding test based on term and buyer type, shifting the debate over Ottawa's financing rules toward new-home supply.
First-time buyers of new homes may see different qualifying rules if Ottawa adopts any of the proposed changes to the stress test or down payment assistance. Buyers considering new construction should track federal announcements before committing to a purchase.
The takeaway
Stress test rules and presale requirements directly shape how many new homes get built, so buyers and builders alike have a stake in how Ottawa responds to the report. Following federal announcements on mortgage policy is the most practical step for anyone planning a purchase.
Further reading
For more on the housing market, explore Residential real estate coverage.
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Should the federal government ease mortgage rules to help first-time buyers afford new homes?
