OSFI has finalized revisions to the CAR guideline, effective Q1 2026, which significantly impacts how banks treat mortgages tied to rental income. The key change prevents borrowers from reusing the same income to qualify for multiple properties, which will make it harder for small investors to grow their portfolios.

• The 50% borrower-income test is reaffirmed, but now income used for one mortgage cannot be used again for another property. This could reduce mortgage qualifying amounts from around $700,000 to $300,000 for typical investors.
•  B-side lenders (credit unions, private mortgage companies) not bound by OSFI regulations can fill the gap by continuing to consider global income, though typically at 1-3% higher interest rates.
•  Combined loan products will be treated as a single risk, new IRB banks must start with high capital floors, and a new Credit Risk Management guideline is coming in January 2026.

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