Salmon Arm mortgage broker reviewing upcoming OSFI rental income rule changes for Canadian real estate investors

Mortgage Tip Tuesday: OSFI Rental Income Rule Changes Coming (Here’s What It Means for Investors)

By Leanne Mollica, Mortgage Broker – My Mortgage Strategy, Salmon Arm BC

If you own rental properties — or you’re planning to grow your portfolio — you may have already heard rumblings about upcoming changes from Canada’s banking regulator, OSFI.

These changes won’t hit all at once, but lenders are preparing, and the impact on real estate investors could be significant.

As your friendly neighbourhood mortgage nerd (yes, I really do read OSFI updates so you don’t have to 😅), here’s what you need to know.

What’s Happening?

Canada’s Office of the Superintendent of Financial Institutions (OSFI) has confirmed revisions to guidelines that affect how lenders qualify borrowers using rental income and employment income for investment properties.

These rules will start rolling out between late 2025 and early 2026, and lenders may begin adjusting their policies even earlier.

In simple terms, OSFI is saying:

“If you’re using rental income to qualify for Property #1, you can’t re-use that same income to qualify for Property #2.”

This is going to matter — especially for multi-property investors who rely heavily on rental income to scale their portfolio.

Why It Matters for Investors

OSFI wants lenders to tighten up how income is used when qualifying borrowers with rental portfolios.

The biggest change?
Harder limits on overlapping rental income.

And that can affect:

  • Your borrowing power
  • Your debt ratio calculations
  • How many rentals you can comfortably qualify for
  • Pricing and lender appetite

Here’s what investors should be aware of:

Key Impacts of the New Rules

Rental income will still be allowed — but with stricter guidelines

Nothing indicates rental income is being removed from qualification.
But it must be:

  • Documented properly
  • Verifiable
  • Applied without “double dipping”

Expect underwriters to take a closer look.

Loans heavily dependent on rental income may trigger new risk labels

If more than 50% of your qualifying income comes from rentals, the mortgage may be classified as income-producing — which can require lenders to hold more capital.

More capital required = lenders may become more cautious on approvals.

Your borrowing capacity may shrink

Especially if your current portfolio is built on:

  • Add-backs
  • Gross-ups
  • Aggressive rental offsets
  • Overlapping rental income
  • Progressive portfolio scaling

This is where working with a broker who knows every lender’s nuance becomes critical.

Expect a wider range of lender interpretations

Every lender implements OSFI guidance differently.
Some will interpret the new rules conservatively; others may take a more flexible approach.

This will create variation in:

  • Qualifying ratios
  • How rental worksheets are calculated
  • Whether leases or T1s are required
  • Portfolio limits
  • Rates for income-producing loans

More documentation will be required

Think:

  • Current leases
  • Tax returns
  • Rent rolls
  • Bank statements showing deposits
  • Proof of expenses
  • Vacancy confirmations

Underwriters will want the full picture.

Pricing may increase for rental-dependent files

Loans where rental income makes up the majority of qualifying income may face:

  • Slight rate premiums
  • Additional scrutiny
  • Stricter terms

Again — not guaranteed, but likely.

The Good News

You’re not being shut out.

There is zero indication that rental income is being eliminated from mortgage qualification.

But timing matters.

These changes begin between late 2025 and early 2026 — and lenders may adjust even earlier. If you are planning to:

  • Add a rental
  • Refinance
  • Pull equity
  • Expand your portfolio
  • Restructure your existing mortgages

…it’s smart to plan ahead now.

And yes — I’m watching this closely and will update you as lenders begin releasing their interpretations.

Why Working With a Mortgage Broker Matters Even More Now

Every lender reads OSFI rules differently.
Every lender updates their policies on their own timeline.
Every lender handles rental income differently — even today.

Working with a broker means:

✔ You get access to all lender interpretations
✔ You can structure your portfolio strategically
✔ You can time refinances and purchases to your advantage
✔ You get ahead of rule changes instead of reacting to them

This is exactly why strategy > rate.

Want clarity on how these changes affect your rental plans? I’m here to help.

Let’s talk through your current portfolio and your long-term goals so you can continue growing confidently — even as the rules evolve.

📲 250-300-2008
📧 leanne@mymortgagestrategy.ca
🌐 MyMortgageStrategy.ca
📍 Serving Salmon Arm, the Shuswap, the Okanagan & all of BC

Turning Home Ownership Dreams Into Reality

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