Mortgage Financing in Greater Victoria, BC: The 2026 Guide

Updated October 30, 2026, after the Bank of Canada's October 28 rate increase.

Financing a home in Greater Victoria means passing a stress test at a rate well above the one you will actually pay, choosing between an insured and an uninsured mortgage, and proving a down payment that runs from about $30,000 on a benchmark Victoria condo to more than $100,000 on a benchmark house. This guide covers every step from pre-approval to completion, with the federal and BC rules as they stand on October 30, 2026.

Pre-qualified, pre-approved and approved are not the same thing

Buyers often say they are "approved" when what they hold is an estimate. The step that actually protects you only happens after your offer is accepted.

What lenders verify

• Identity and status: government ID, and for newcomers proof of permanent residence or a work permit.
• Income: an employment letter, recent pay stubs and often T4s or Notices of Assessment. Self-employed borrowers are typically asked for two years of Notices of Assessment and full returns.
• Credit: your report and score. For an insured mortgage, at least one borrower or guarantor needs a score of 600 or more.
• Debts: every monthly obligation, including car and student loans, support payments, cards and lines of credit.
• Down payment and closing funds: where the money came from and how long it has been in your accounts.
• The property: its value, title and insurability and, for a condo or townhouse, the strata corporation's documents.

The mortgage stress test (minimum qualifying rate)

Every insured mortgage in Canada, and every uninsured mortgage from a federally regulated lender such as a bank, must be qualified at the minimum qualifying rate: the greater of your contract rate plus 2 percentage points, or 5.25%. You pay the contract rate, but you must show you could afford payments at the qualifying rate. The rule covers fixed and variable mortgages of every term.

For insured mortgages (less than 20% down), the federal mortgage insurance rules have required this qualifying rate since June 1, 2021, and they apply to every lender, credit unions included. For uninsured mortgages at banks and other federally regulated lenders, the rule comes from the Office of the Superintendent of Financial Institutions (OSFI) and its Guideline B-20. OSFI reviews the floor and buffer at least once a year, and in January 2026 it left both unchanged.

Switching lenders at renewal: the November 2024 change

Since November 21, 2024, OSFI no longer expects a federally regulated lender to apply the qualifying rate to an uninsured mortgage that moves to it at renewal as a straight switch: the same loan amount and no longer remaining amortization. Insured mortgages already had that exemption under the federal rules, and from December 16, 2024 it was extended to lender-insured ("low-ratio") mortgages, with up to $3,000 allowed for transaction costs. Renewing with your current lender has never required requalifying. Borrowing more, extending the amortization or refinancing means you are tested again.

Credit unions and the loan-to-income cap

BC credit unions are regulated by the BC Financial Services Authority (BCFSA), not OSFI, so Guideline B-20 does not bind their uninsured loans. Provincial guidance expects them to build an interest-rate buffer into affordability, and many use the same qualifying rate as the banks, but policies differ, which is why buyers with unusual files often talk to a credit union. Separately, since each bank's 2025 fiscal year OSFI has limited the share of a lender's new uninsured mortgages above 4.5 times the borrower's income. It is a portfolio cap on the lender, not on any one borrower, but it can make very high loan-to-income files harder to place.

Minimum down payment, and the December 2024 changes

For mortgage insurance applications submitted since December 15, 2024, an insured mortgage is available on homes priced below $1.5 million (the cap had been $1 million since 2012):

• $500,000 or less: 5% of the price.
• $500,000 to under $1.5 million: 5% of the first $500,000 plus 10% of the rest.
• $1.5 million or more: 20% of the price, with an uninsured mortgage only.

Benchmarks are the Victoria Real Estate Board's September 2026 figures for the Victoria Core. Note the cliff at $1.5 million: the last $1,000 of price more than doubles the down payment, because insurance is no longer available. Owner-occupied homes with three or four units need at least 10% down, and lenders may ask more of self-employed borrowers or those with weak credit.

30-year amortization for first-time buyers and new builds

Also from December 15, 2024, an insured mortgage can be amortized over up to 30 years (instead of 25) when the borrower is a first-time buyer or the home is newly built; from August 1, 2024 until then, a buyer had to be both. For this rule you are a first-time buyer if any of these is true:

• you have never purchased a home;
• in the current year or the previous four calendar years, you have not lived as your principal residence in a home owned by you or your current spouse or common-law partner; or
• your marriage or common-law relationship broke down in that period and you have been separated for at least 90 days.

A home is newly built if it has never been occupied as a residence. The insurers add 0.20% to the premium for an amortization beyond 25 years. Uninsured mortgages (20% or more down) are outside these rules, and many lenders already offer them over 30 years.

Mortgage default insurance premiums

With less than 20% down, your lender must insure the mortgage with one of Canada's three default insurers: Canada Mortgage and Housing Corporation (CMHC), Sagen or Canada Guaranty. The lender chooses the insurer and passes the cost to you. All three use the same standard rates, charged on the mortgage amount:

• Added to the loan. The premium is normally added to your mortgage and is non-refundable.
• No PST in BC. British Columbia does not charge provincial sales tax on the premium. CMHC lists Ontario, Quebec and Saskatchewan as the provinces that do, and there the tax must be paid in cash at closing.
• It protects the lender, not you. It is different from optional mortgage life or disability insurance, which covers your payments.
• At 20% or more down you normally pay no premium, unless the lender requires insurance anyway, as it may for some self-employed borrowers or those with weak credit. The lower tiers also apply to refinances and portability top-ups.

GDS, TDS and how lenders count your income

Lenders test affordability with two debt service ratios, both calculated at the qualifying rate:

For uninsured mortgages each lender sets its own limits; many use similar figures and some flex them for strong files. Heating is an estimate: your actual costs if you have them, or a reasonable figure for the home's size, location and heating system.

Rental and suite income

Many Greater Victoria buyers count on a suite. For an insured mortgage on the home you are buying, CMHC allows up to 100% of the suite's gross rent to be added to your income for an owner-occupied two-unit home, and up to 50% for an owner-occupied three- or four-unit property or a two- to four-unit rental. A single unit you will not live in cannot be insured at all. Rent from other properties you own is counted either net of that property's expenses or as a partial add-back, with its mortgage payments in your debts.

Lenders differ on suites that were never permitted, and an appraiser may note one. Ask early whether the rent will count and what proof is needed: a lease, rent deposits or a market-rent estimate. For the zoning side, see secondary suites and Bill 44 in Victoria.

Illustrative example: a first-time buyer and a $550,000 condo

Illustrative example, with hypothetical figures. A first-time buyer agrees to buy a Victoria condo for $550,000, close to the Victoria Core benchmark. She puts the minimum down and chooses a 30-year amortization. The 4.25% five-year fixed contract rate is an assumption for the arithmetic, not a lender quote; payments are compounded semi-annually, as is standard for Canadian fixed-rate mortgages.

She qualifies on $120,000 of household income. The lowest income that keeps her GDS at 39% is about $117,200 ($45,697.32 divided by 0.39). Her real monthly cost is lower than the stress-tested figure: $2,653.76 for the mortgage plus $200 tax, $75 heat and the full $450 strata fee, or about $3,379.

On completion she also owes property transfer tax: $9,000 on $550,000 (1% of the first $200,000 plus 2% of the rest). As a qualifying first-time buyer she is exempt on the first $500,000, a saving of $8,000, so she pays $1,000. The other costs in the closing costs checklist come on top.

Choosing the mortgage itself

Term versus amortization

The term is how long your rate and conditions last, usually one to five years. The amortization is how long it would take to repay the whole loan, 25 or 30 years for most buyers. At the end of each term you renew, switch or repay. A longer amortization lowers the payment and helps you qualify, but adds interest over the life of the loan and, on an insured mortgage, the 0.20% surcharge.

Prepayment privileges and penalties

Closed mortgages let you prepay within set limits, typically an annual lump sum and an increase to your regular payment; most limits reset each year and do not carry forward. Open mortgages can be repaid any time but cost more. If you break a closed mortgage early, including when you sell, the penalty is usually the higher of three months' interest or the interest rate differential (IRD), roughly the interest the lender loses for the rest of the term because today's rates are lower than yours. Methods vary (some lenders compare posted rates rather than the discounted rate you paid), and the method can change the penalty a great deal.

Illustrative example. With $400,000 owing at 4.50% and 30 months left on a fixed term, three months' interest is about $4,500 ($400,000 x 4.50% x 3/12). If the lender's comparison rate for 30 months is 3.50%, a simplified IRD is $400,000 x 1.00% x 2.5 years = $10,000, so the penalty would be $10,000. Your lender's formula decides the real figure: get a written quote before you list a home.

Portability and assumability

Portability lets you move your mortgage, rate and terms to a new home and avoid the penalty; if you need more money, lenders usually blend your old rate with a new one on the extra amount, and you must qualify. Assumability lets a buyer take over a seller's mortgage with the lender's approval. Both depend on your contract, so read those clauses before you sign.

The rate environment in late 2026

On October 28, 2026 the Bank of Canada raised its policy rate by a quarter point to 2.50%, its first increase since July 2023, after seven straight decisions at 2.25%. The Bank said inflation had run around 3% since April and was expected to reach about 3.5% by year-end, driven largely by energy prices, and that the rate could need to rise further, though it would proceed carefully. The next decision is scheduled for December 9, 2026.

• Variable and adjustable rates follow lenders' prime rates, which rose by the same quarter point. National Bank's prime, for example, became 4.70% on October 29, 2026.
• Fixed rates are priced mainly off government bond yields, so they move with markets rather than on announcement day.
• Rate holds protect a pre-approved buyer if rates rise while shopping. Ask how long yours lasts and whether it can be extended.

This guide does not quote lender rates, which change daily and depend on your file. Compare offers on rate, term, prepayment privileges, penalty method and portability together.

Where the down payment comes from

A couple can stack these: two FHSAs and two HBP withdrawals can put up to $200,000 toward one home, and the Canada Revenue Agency allows both programs for the same purchase. RRSP contributions made in the 90 days before an HBP withdrawal may not be deductible. CMHC also allows a borrowed down payment in limited cases, at the 4.50% premium, but not for non-permanent residents.

Proof of funds and the 90-day history

Lenders must know where your money came from, under anti-money-laundering rules as well as their own policies. Expect to provide about three months (90 days) of statements for each account holding the down payment, showing your name and account number. Deposits other than pay need an explanation and a paper trail; one national lender's published policy requires a documented source for any deposit of $10,000 or more. Move money early, avoid cash, and keep statements for any account you close.

Financing a strata unit, leasehold, co-op or 55+ home

Most Greater Victoria condos and many townhomes are strata properties, and the strata corporation's health becomes part of your loan. Many lenders rely on the appraisal and the information certificate; others also ask for the depreciation report, minutes or insurance certificate, especially for older buildings or where big repairs are coming.

• Form B Information Certificate. The strata must provide it within 7 days, for no more than $35 plus copying. It shows fees, approved special levies, the contingency reserve fund balance, legal proceedings and, since April 1, 2023, a summary of the strata's insurance, with the budget, rules and latest depreciation report attached.
• Depreciation report. Since July 1, 2024, stratas with five or more lots must get one every five years and can no longer waive it by a three-quarter vote. A big repair bill against a thin reserve means special levies are coming. See our guide to strata depreciation reports.
• Reserve contributions. Since November 1, 2023 a strata must put at least 10% of its operating budget into the reserve fund each year.
• Insurance deductibles. Water and earthquake deductibles can be very large, and an owner can be charged the deductible for damage that starts in their unit. Your condo policy should cover that exposure. See strata insurance deductibles.
• Special levies. Who pays a levy that is approved, or about to be voted on, should be settled in the contract.

New construction and presales

A presale, common in Langford, Colwood and downtown Victoria, separates the day you commit from the day you borrow, often by two years or more. That gap is the core risk.

• You cannot lock financing that far ahead. Rate holds run 60 to 130 days, so final approval comes near completion, when your income, debts, rates and even the rules may have changed.
• The appraisal happens at completion. If the unit appraises below your price, the lender lends on the lower value and you cover the difference.
• Failing to complete is costly. You can lose your deposit, and the developer can sue for its losses on a resale.

Under the Real Estate Development Marketing Act, presale deposits must be held in trust by a brokerage, lawyer or notary unless the developer has approved deposit insurance, and you have seven days to cancel after the later of signing and receiving the disclosure statement. New homes qualify for a 30-year insured amortization whether or not you are a first-time buyer, and they carry GST, with partial relief for some buyers; see our transaction taxes guide. Before signing, ask a lender what you would qualify for today with a buffer for higher rates, and read our guides to presales and new home warranty and new condo prices per square foot. Building on your own lot needs a progress-draw mortgage, which advances money in stages as work is confirmed.

Newcomers and non-residents

The subject-to-financing clause and low appraisals

In BC the financing condition goes into the terms section of the Contract of Purchase and Sale. It gives you until a set date to obtain a mortgage you are satisfied with; if you cannot, the deal ends and your deposit is returned once both sides sign a release. BCFSA's template clause guidance suggests spelling out the loan you need (amount, maximum rate and amortization), and you are expected to make an honest effort to get it, not to use the clause as a free exit.

1. Send everything the day the offer is accepted: the signed contract and addenda, the listing, the disclosure statement and, for a strata, the Form B, bylaws, minutes and depreciation report.
2. Leave enough time. The lender needs an appraisal, a document review and, for an insured loan, insurer approval. Ask your lender how many business days to allow before you set the subject date.
3. Read the commitment's conditions, such as a satisfactory appraisal, proof of down payment, a gift letter or the sale of your current home. Remove the subject only when you can meet them.
4. Remove it in writing by the deadline. After that, a financing problem is your problem.

Illustrative example of an appraisal shortfall. You agree to pay $800,000 and plan 20% down: $160,000 cash and a $640,000 mortgage. The appraisal comes in at $780,000, and the lender lends 80% of the lower of price and value, or $624,000. You now need $176,000 in cash, $16,000 more than planned, or a lower price, or an insured mortgage and its premium. Insured lending works the same way: the down payment is calculated on the lower of price and appraised value, and you pay anything above it.

Between subject removal and completion, do not change jobs, take on new debt, co-sign for anyone or move your down payment without telling your lender. Many lenders re-check employment and credit before they release funds.

Closing costs to budget for

Lenders want to see that you can pay closing costs from your own funds, on top of the down payment.

• Property transfer tax: 1% of the first $200,000, 2% up to $2 million and 3% above, plus 2% more on residential value over $3 million. First-time buyers pay none on the first $500,000 of a home worth up to $835,000, with a partial exemption to $860,000. See our BC transaction taxes guide.
• GST on a newly built or substantially renovated home.
• Legal or notary fees and disbursements, including searches and registration, and title insurance if recommended.
• Appraisal and inspection: the lender's appraisal fee (sometimes paid by the lender) and your home inspection; see the home inspection guide.
• Strata documents: the Form B and copies of records.
• Adjustments for property taxes, strata fees and utilities the seller has prepaid, from the adjustment date.
• Home insurance from completion day, which the lender requires before it advances funds.
• Interest adjustment if your lender charges interest from completion to the start of the first payment period.
• Moving, utility hook-ups and immediate repairs.

Mortgage broker, bank or credit union?

Compare at least two written offers. The lowest rate is not always the cheapest mortgage once penalties, prepayment limits and restrictions are counted; some low-rate products cannot be ported or broken except on a sale.

Timeline: from pre-approval to the keys

1. Three to six months before you shop

   Prepare

   Check your credit report, pay down card balances, open an FHSA if you qualify, and make RRSP contributions at least 90 days before any HBP withdrawal. Keep three months of statements for every account holding your down payment.

2. Pre-approval

   Rate held 60 to 130 days

   Get a written maximum and a rate hold, and set your search budget below the maximum to leave room for closing costs.

3. Writing the offer

   Your contract sets the dates

   Include a specific financing subject with a realistic date, and completion and possession dates your lender and lawyer can meet.

4. Accepted offer: the subject period

   The critical days

   Pay the deposit on time, send the contract and strata documents to your lender, book the inspection and get insurance quotes. The lender orders the appraisal and issues a commitment.

5. Subject removal

   In writing, by the deadline

   Remove subjects only when the commitment's conditions are met. From here the contract is firm.

6. Lawyer or notary

   In the days before completion

   Your lender instructs your lawyer or notary. You sign the mortgage and transfer documents, confirm insurance, and deliver the rest of your down payment and closing costs by bank draft or wire.

7. Completion and possession

   Registration at the Land Title Office

   The transfer and mortgage are registered, the lender advances funds and the seller is paid. You get the keys on the possession date, often a day or more later.

Questions buyers ask

Photo from Wikimedia Commons, used under the licence linked in the caption.