OSFI’s LTI Rules Get Real: What Ottawa Borrowers Need to Know in 2026

Date Posted: January 22, 2026

Introduction
OSFI’s potential rollout of Loan-to-Income (LTI) oversight offers new clarity—and limits—for Ottawa borrowers. As the agency proposes capping uninsured mortgages at 4.5× gross income, home financing strategies must adapt.

“We’re going to test [LTI] next year (2025) and if it works the way we want, and we’ll probably have to tighten or loosen the bolts here and there, we expect it be a legitimate alternative or a legitimate complement to the MQR,” OSFI Superintendent Peter Routledge said in a speech delivered in October 2024. “We’ll make that decision after we have a full year of testing to make sure if we do anything, we do it right.”

“OSFI will be evaluating the Loan-to-Income (LTI) limit framework until at least January 2026, after which we will determine if the LTI is an appropriate complement or replacement for the Superintendent prescribed Minimum Qualifying Rate,” OSFI spokesperson Cory Harding told Canadian Mortgage Trends.

What’s Changing

• OSFI is tracking lender portfolios—and those who exceed the 4.5× LTI cap may face tighter appraisals or restricted approvals.
• Rental income used in qualification can't be re‑used across properties, restricting leverage for investors.

Impact on Ottawa Buyers

• High-income households with low down payments may now be limited in borrowing power
• Investors find scaling through multiple properties more difficult unless they increase down payments or use alternative financing

Strategies for Brokers & Borrowers

• Run stress-tested scenarios using both traditional stress test and 4.5× LTI cap
• Consider staged acquisition (buy, refinance, repeat) to spread leverage over time
• Evaluate alternative lenders who may more flexibly interpret rental income

Conclusion
OSFI’s LTI oversight reshapes mortgage approvals for higher-income and investor borrowers. Ottawa brokers can still unlock financing—by carefully navigating caps, income use, and lender criteria. As OSFI's evaluation of the changes comes to an end January 2026, we could hear news of these changes in the coming months.