Canada’s banking regulator has finalized changes to its Capital Adequacy Requirements (CAR) guideline that clarify how lenders must treat income-producing residential real estate.

The revisions, effective with institutions’ first fiscal quarter of 2026, update how banks classify mortgages where rental income is a significant factor.

At OSFI’s quarterly Industry Day, the regulator stressed that income used to qualify for one mortgage cannot simply be counted again for another, tightening how both rental and employment income can be applied across multiple properties.

Mark Joshua, OSFI’s Director of Capital and Liquidity Standards, said the intent is “to ensure that income that’s used for one mortgage is not, then again, used a second time for another one. So…the income that was used on the first mortgage is removed or corrected for” when assessing a borrower’s additional properties.

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