New Mortgage Insurance Rules Arrive February 1, 2027: What Changes for Three and Four Unit Homes in Markham

Mortgage Insurance · Markham Real Estate

A Markham homeowner hears that new financing rules for three and four unit homes are on the way. The first question is usually a practical one: does this mean I can add units on my lot next year?

The short answer is no, not by itself. Mortgage insurance is about how a lender can finance a building. Zoning is about what the City allows on a specific property. Those are two different things, and it helps to keep them apart.

Michael John Lau, REALTOR®, works with Markham buyers and owners who want the facts, not the headlines. He has 80+ reviews from local clients. This guide separates the February 1, 2027 insurance products, which have a published start date, from the Budget 2026 proposals, which do not.

What starts on February 1, 2027

The Department of Finance Canada published parameters for new insured mortgage products. These measures will be available for mortgage insurance applications that lenders submit to mortgage insurers on or after February 1, 2027.

New three and four unit homes

For the construction or purchase of newly built three and four unit homes, the published parameters include:

• A maximum loan of 90% of the projected property value when construction is complete.
• No owner occupancy requirement.
• No maximum property value.
• A maximum 30-year amortization. In plain language, amortization is the length of time you take to pay off the loan.
• A maximum gross debt service (GDS) ratio of 39% and a maximum total debt service (TDS) ratio of 44%, plus the minimum qualification rate.
• At the time of loan approval, at least one borrower or guarantor must have a credit score of 600 or higher.

A 90% loan to value means you could finance up to 90% of the projected value, subject to the insurer's and the lender's own rules.

The 30-year amortization and debt-service limits apply to the completed home. For construction financing, the Department of Finance says those limits do not apply, and insurers will use their own rules to judge whether a borrower can carry a construction loan.

Five to fifty unit buildings

Separately, new products would support five to fifty unit properties for construction, purchase, refinance or renewal. The published parameters include:

• A 90% loan to value for new construction, and 85% for other deals.
• Amortizations of up to 50 years for new construction, and 40 years for other deals.
• No maximum property value.
• No owner occupancy requirement.
• The borrower must have a net worth of at least 25% of the loan, with a $100,000 minimum.

For construction financing of five to fifty unit buildings, the Department of Finance likewise says the amortization and debt-coverage limits do not apply, and insurers will use their own underwriting rules.

What Budget 2026 only proposed

A different change is easy to mix up with the February 1 products. Budget 2026 proposes to raise the home price limit for optional mortgage insurance from $1 million to $1.5 million, and to permit 30-year amortizations for those insured mortgages, provided that at least one borrower is a first-time buyer or the home is newly built.

The budget chapter does not give a start date for that proposal. Do not attach the February 1, 2027 date to the optional $1.5 million cap.

For a wider look at the budget, read what Budget 2026 means for Markham home buyers. An earlier post also explains the 30-year amortization incentive for first-time buyers.

What this does not change in Markham

These federal financing rules do not rezone a Markham lot. The City's November 3, 2026 Housing Accelerator Fund update, prepared for the November 10 Council agenda, says Initiative 2, four units as of right, "was ultimately not implemented and this remains incomplete."

If you are thinking about adding units, or buying a property with that plan, start with the City's zoning staff for that specific lot. For background, see what as of right zoning means in Markham and whether you can build a garden suite on a Markham property. A related guide on the missing middle in Markham is also useful context.

How to use this if you are buying or planning

• Looking at a newly built three or four unit home? Ask your lender how the February 1, 2027 products may apply once applications can be submitted.
• Watching the optional insurance cap? Treat the $1.5 million proposal as a proposal until an official start date is published.
• Does your plan depend on adding units to a Markham lot? Confirm zoning first. Financing cannot override the City's rules.
• Talk to a professional. A licensed mortgage professional can explain what you personally qualify for. This article is general information, not mortgage advice.

Frequently asked questions

Please note: This article is general information only. It is not legal, tax, zoning or mortgage advice. Financing rules and budget proposals can change, and zoning is decided lot by lot. Speak with a licensed mortgage professional about your own qualification, and with the City of Markham about any specific property.

Sources

• Department of Finance Canada, Mortgage Insurance Rule Changes to Support Missing Middle Housing (November 2026)
• Budget 2026, Chapter 3 (tabled November 5, 2026)
• City of Markham, CMHC Housing Accelerator Fund Update (November 3, 2026)

Michael John Lau, REALTOR® · eXp Realty, Brokerage · Serving Markham & York Region, Ontario

Photo: Loozrboy, CC BY-SA 2.0, via Wikimedia Commons