OSFI’s New Rule for Rental Properties: What It Really Means for You

You might’ve seen some buzz online lately about new OSFI mortgage rules, especially if you follow real estate threads or mortgage news. The latest update sounded confusing, and even a bit scary.

Here’s what’s actually going on in plain English, and how it could (or probably won’t) affect you if you own, or plan to buy, a rental property.

What OSFI Said

Last week, Canada’s banking regulator (OSFI) told lenders:

“If a borrower has more than one mortgage, they can’t count the same income twice when qualifying for each property.”

That one line sent everyone, mortgage pros included, into a spin.

Some people thought it meant:

“If you already have a home mortgage, you can’t use your personal income at all to qualify for a rental property.”

Thankfully, that’s not true.

What It Actually Means

Here’s the real story:

Let’s say you make $100,000 a year and you use $30,000 of that to qualify for your own home’s mortgage. That leaves $70,000 of income that can still be used to qualify for a rental property mortgage.

So yes, your personal income still counts. You just can’t reuse the same income for both properties.

OSFI’s new rule isn’t about changing who qualifies for a mortgage. It’s about how banks label and track their rental property loans behind the scenes.

Why They’re Doing This

OSFI wants to know how much of a rental mortgage depends on rental income versus your own income.

If more than half of what’s used to qualify comes from the property itself (the rent), OSFI calls that an income-producing property.

When a loan is labeled that way, the bank has to keep a bit more money in reserve to cover potential risks.

That’s it. This rule doesn’t mean you personally need more income, just that the bank might treat the loan differently on their books.

Will This Change Mortgage Rates?

Probably not much, if at all.

A few lenders might adjust their pricing slightly, but one banker estimated the change could be around 5 basis points (that’s 0.05%).

On a $650,000 rental property mortgage, that’s roughly $1,500 more in interest over five years. Not nothing, but not a deal-breaker either.

The new rule officially takes effect November 1, and mostly affects how the big banks report risk, not how they approve borrowers.

What You Should Do

If you already own rental properties or are thinking about investing in one:

• Don’t panic. This isn’t a new qualification rule, it’s a reporting one.

• Keep good records of your income and rental cash flow. Lenders will still look at both.

• Get advice before you buy. The right strategy can help you use your income efficiently across multiple properties.

Denise’s Take

Canada’s mortgage rules are already pretty strict, which is one reason our system is so stable. Sometimes OSFI adds more rules that sound scary, but this one is really just a behind-the-scenes adjustment.

Think of it like a bookkeeping update for banks, not a roadblock for borrowers.

If you’re wondering how this could affect your borrowing power or future plans, let’s review your numbers and make a plan that works for you.