Ottawa's Budget Has a $1.5 Million Number in It. Here's What It Means for Toronto Buyers and Sellers

Ottawa tabled its budget on November 5, and buried in all the billions is one number Toronto buyers should circle: $1.5 million. Here's the short version. Nothing in this budget makes houses cheaper tomorrow. But a few changes could make it a little easier to finance a home in the $1 million to $1.5 million range (hello, east-end semis), the foreign buyer ban likely isn't ending in January, and anyone building a triplex or fourplex gets a much better financing deal starting February 1.

I read the budget chapter and the industry breakdowns so you don't have to. Here's the tea, translated into plain English.

The $1.5 million number: what "optional mortgage insurance" actually means

This one sounds boring. Stay with me.

When you put less than 20% down, your mortgage has to be insured. That cap already went up to $1.5 million back in December 2024.

What Ottawa is proposing now is different. It's about optional mortgage insurance, the kind a lender can choose to put on an eligible loan. The insurance protects the lender, not you, and that can let the lender offer a lower rate. Right now, the price limit for that optional insurance is $1 million. The budget proposes raising it to $1.5 million.

Translation: if you're buying a home between $1 million and $1.5 million, more lenders may be able to treat your mortgage like an insured one, which may mean a sharper rate. That's exactly the price band where a lot of the Riverdale, Leslieville and Danforth homes we sell land.

The budget also proposes allowing 30-year amortizations on these mortgages, but only if at least one borrower is a first-time buyer or the home is newly built.

The honest caveat: this is a proposal. There's no start date yet. Don't build your budget around it until it's real.

The foreign buyer ban probably isn't ending in January after all

Back in October, we wrote about Canada's foreign buyer ban expiring on January 1, 2027. Well, Ottawa now wants to change that.

The budget proposes extending the ban on foreign purchases of existing homes by two more years, to January 1, 2029. At the same time, it would exempt newly built homes, so foreign buyers could purchase new construction.

Translation: for resale houses on streets like Pape, Jones or Coxwell, nothing changes if this passes. The ban stays. The new-build exemption mostly matters for condos and pre-construction. The government says legislation and regulations are coming "in short order," but there are no details yet on how the new-home exemption will actually work.

Triplexes and fourplexes just got a better financing deal

If you've been eyeing that big east-end lot and thinking "multiplex," this part matters.

Starting February 1, 2027, lenders can submit insurance applications for newly built three- and four-unit properties with:

• Financing up to 90% of the property's value (so 10% down)
• No price cap
• No requirement to live in one of the units
• Amortizations up to 30 years on the completed property, with the usual debt-service limits and stress test

Toronto already allows fourplexes across the city (we covered the city's free fourplex and sixplex plans in October). Financing has been the sticking point for a lot of homeowners. This helps.

The honest caveat: this is for new construction. As REM put it: "An existing fourplex does not qualify just because it has the right number of doors." If you're buying an old house that's already split into units, this isn't your program.

For bigger buildings (five to 50 units), private insurers can now compete with CMHC, with amortizations up to 50 years on new construction.

A sleeper for upsizers: your sale proceeds may get more protection

This one didn't get much airtime, but I think upsizers should know about it.

The budget proposes raising federal deposit insurance from $100,000 to $250,000. It also proposes temporary coverage for larger balances after certain events, like a home sale.

Translation: if you sell your Leslieville semi before you close on your Upper Beach detached, there's often a big pile of money sitting in your account for a few weeks. Right now, most of that isn't covered by deposit insurance. This proposal could change that.

The honest caveat: the budget doesn't say how much would be covered or for how long. It's a proposal with no start date. In the meantime, talk to your bank and your lawyer about where your proceeds sit between closings.

The small stuff that could save you real money

A few smaller items worth knowing:

• Mortgage rate transparency: the Bank of Canada would publish more detailed data on insured mortgage rates, so you can see whether the rate you're offered is fair. No start date yet.
• Prepayment penalties: Ottawa will consult on making penalties on insured mortgages easier to understand. That matters if you break your mortgage early to upsize. It's a consultation, not a cap.
• Income verification through the CRA: a pilot so lenders can verify income directly with the CRA, with funding starting in 2027-28. It could mean fewer paperwork headaches, especially for self-employed buyers.

What it means for you

Let's be honest. This budget doesn't fix affordability, and it doesn't flip the market. Even CREA said the measures are a welcome step but don't yet close the gap for middle-class Canadians. This fall is still a slower market, and I'm not going to pretend otherwise.

But here's how I'd think about it:

• Buying between $1 million and $1.5 million? Keep an eye on the optional insurance change. It could help on rate once it's in effect. Until then, plan with today's rules.
• First-time buyer? The 30-year amortization option may widen. Longer amortization means lower payments but more interest over time, so run both numbers.
• Upsizing (selling and buying)? Watch the deposit insurance proposal, and ask about prepayment penalties before you break your current mortgage.
• Own a big lot and dreaming of a multiplex? February 1 is the date to know. Talk to a mortgage broker and a builder now so you're ready.

Every one of these depends on your numbers, your neighbourhood and your plans. That's where we come in.

FAQ

Does the 2026 federal budget lower mortgage rates?

Not directly. It proposes raising the price limit for optional mortgage insurance from $1 million to $1.5 million, which may help lenders offer sharper rates on homes in that range. It's a proposal with no start date yet.

Is the foreign buyer ban ending on January 1, 2027?

Not under this budget. It proposes extending the ban on foreign purchases of existing homes to January 1, 2029, while exempting newly built homes. Legislation still has to follow.

Can I get 10% down financing on a triplex or fourplex in Toronto?

For newly built three- and four-unit properties, yes, starting with insurance applications submitted on or after February 1, 2027. There's no price cap and no requirement to live in a unit. Existing multiplexes don't qualify based on unit count alone.

When do these changes take effect?

The triplex, fourplex and five-to-50-unit financing changes start February 1, 2027. Most of the other measures, including the $1.5 million optional insurance limit and the deposit insurance changes, are proposals with no start date yet.

Let's talk about your next move

Budgets are full of big numbers. What matters is what they mean for your house, your street and your next chapter. If you're wondering how any of this plays into your plans, send us a message or give us a call. We'll give you the honest read on your situation, no pressure.

This post is general information, not financial or legal advice. Talk to your mortgage professional and lawyer about your situation.

Sources

• Government of Canada, Budget 2026, Chapter 3: A more affordable life: https://budget.canada.ca/2026/report-rapport/chap3-en.html
• Canadian Mortgage Trends, "Budget 2026 explained: 12 changes for housing, mortgages and banking": https://www.canadianmortgagetrends.com/2026/11/budget-2026-explained-12-changes-for-housing-mortgages-and-banking/
• CREA, "CREA's response to federal Budget 2026": https://www.crea.ca/cafe/creas-response-to-federal-budget-2026/
• REM, "FOCH: What Budget 2026 changes for clients buying small rentals": https://realestatemagazine.ca/foch-what-budget-2026-changes-for-clients-buying-small-rentals/
• REMI Network, "Foreign buyers could gain access to new condos": https://www.reminetwork.com/articles/federal-budget-2026-proposes-key-changes-for-canadas-housing-sector/
• TRREB, "TRREB Welcomes Federal Budget Measures to Boost Housing Supply and Affordability": https://www.globenewswire.com/news-release/2026/11/06/3397857/0/en/trreb-welcomes-federal-budget-measures-to-boost-housing-supply-and-affordability.html