✍️ By Debbie Balfour | WBN News | October 30, 2025 | Click HERE for your FREE Subscription to WBN News and/or to be a Contributor.

If you’re an investor used to leveraging the projected rental income of a property to secure financing, get ready to pivot. The regulatory landscape in Canada is shifting, and the days of easily qualifying for a mortgage based on rental projections are becoming tougher. The new rules introduced by the Office of the Superintendent of Financial Institutions (OSFI) will affect how lenders assess investment-property mortgages—and directly impact how you qualify as an investor.

What’s Changing

Under the updated guidelines launching fully in 2026, when a loan for a residential property is supported primarily by rental income rather than the borrower’s employment or other verifiable personal income, the property gets classified as “income-producing residential real estate” (IPRRE). In practice, that means if more than 50 % of the qualifying income comes from the property, lenders will treat it as higher risk.


Equally important: lenders can no longer reuse the same income stream across multiple mortgages. If you used rental income (or salary) to qualify for Property A, you can’t count that same income again for Property B.
In short, projected rental income will face stricter limits on how much lenders can rely on it, how lenders classify those loans, and how they treat portfolio scaling.

How Investors Will Be Affected

  • Lower borrowing power: If your qualification depended heavily on projected rent, you may qualify for less or require more personal income instead of relying on rent.
  • Higher rates or tougher terms: Loans flagged as IPRRE impose higher capital requirements for lenders, which are often passed to borrowers through higher interest or stricter down-payments.
  • Portfolio-building slows down: Investors who previously stacked deals by counting the same income across purchases will struggle to replicate this strategy under the new rules.
  • Market segmentation impact: In smaller markets or lower-price properties with high rental yield, the “50% rule” is more easily triggered, and so these markets face a greater risk of being restricted.
  • Due Diligence increases: Lenders will scrutinize rental income documentation more carefully, ask for leases, look for vacancy risk, and reduce reliance on optimistic projections.

Real-World Examples

  1. Example A: Suppose you buy a duplex in a smaller city (purchase price $350,000), projecting a monthly rent of $2,300. If your personal salary is $50,000, the rental income might represent over half your qualifying income—so the loan is flagged as IPRRE. You’ll pay more and count less toward your portfolio next time.
  2. Example B: In a higher-priced city (purchase $1 million, monthly rent $4,000), your salary is $150,000. Here, the rent is a smaller share of your total income. You might avoid IPRRE status and still qualify more easily. According to commentary, investors in cities like Toronto may face less impact.
  3. Example C: You already own Property A and used rental income plus salary to qualify. Now you apply for Property B. Under new rules, the rental income used for A cannot be reused for B. Your lender will subtract that amount from the calculation.

What You Should Do

  • Re-run your numbers conservatively: Assume lower rent, vacancy, maintenance, and treat rental income less favourably.
  • Boost personal income documentation: Strong employment income now matters more because lenders will expect you to rely less on rent alone.
  • Space out property applications and ensure each property stands on its own merits (income + property quality + market).
  • Engage a mortgage broker early: Ask which lenders are prepared for IPRRE classification and how they treat rental income under new rules.
  • Choose markets with solid fundamentals: High-value properties with strong salary backing will be in better shape than cheap high-yield rentals reliant purely on projected rent.

Adapting Your Investment Strategy for 2026 and Beyond

For investors who previously counted on projected rental income as the main qualifier, the game has changed. Each new property will need its own standalone income story, and you may not be able to recycle income so easily. While not a full stop on investor financing, the new rules mean fewer “easy” deals, more emphasis on personal income, and stronger underwriting. The savvy move? Adjust now, run the stress tests yourself, and build your strategy around income stability and property fundamentals.

Debbie Balfour | Real Estate Investing Success Coach + Podcast Host
📍 Website: www.DebbieBalfour.com
📧 Email: Debbie@DebbieBalfour.com
🔗 LinkedIn: Debbie Balfour
▶️ YouTube Channel: youtube.com/@DebbieBalfour

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TAGS: #Real Estate Investing #Mortgage Rules #Rental Income #Investor Financing #Canada Real Estate #Property Investment #WBN News Canada #WBN News Langley #WBN News Abbotsford #WBN News Okanagan #Debbie Balfour

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