New rules rarely make headlines for long—but they sure linger in underwriting. Since banks began enforcing OSFI’s 4.5× loan‑to‑income (LTI) cap at their 2025 fiscal year start, approvals are starting to look…different. Here’s what we’re seeing from the trenches.
1. Quick refresher
- Banks must keep no more than 25 % of new uninsured mortgages above 4.5 × household income—measured across their whole portfolio, not case by case. OSFI
- The traditional “contract + 2 %” stress test still applies to insured loans, and lenders can layer it on top if they’re nearing their cap.
2. Early winners and losers
| Borrower profile | Pre‑rule | Post‑rule reality |
|---|---|---|
| High‑income, low debt | Easy approval | Still golden—banks love you under any rule. |
| Dual‑income 90 K family buying $800 K home | Often squeaked by | May now wait if lender’s high‑LTI quota is full. |
| Self‑employed with big write‑offs | Case‑by‑case | More push to alternate or B‑lender where caps don’t bite. |
3. How lenders are adapting
- Pricing tiers: Some banks now quote a 10–15 bp premium if your file pushes them over their quarterly limit.
- Shorter amortizations: Trimming to 25 years shrinks the mortgage relative to income—slipping you under the 4.5× line.
- More exceptions in rural markets: Lower prices mean fewer high‑LTI files, so regional branches still have room.
4. Your playbook
- Know your ratio. Divide requested mortgage by gross household income; aim for 4.4× or less.
- Kill consumer debt. Every $100/month car payment can chop $15 K off your room under the cap.
- Show every penny of provable income—side hustle, bonuses, dividends.
- Shop multiple lenders. Quotas reset each quarter and vary bank‑to‑bank.
Heads‑up: OSFI reviews compliance data this December. Tweaks are possible, but portfolio caps are here to stay. Let’s crunch your numbers early so the new rules don’t stall your move.