A new index from Canada Mortgage and Housing Corporation (CMHC) confirms what many borrowers and investors are already feeling on the ground: Ottawa, Montréal, and Halifax are now under near-historic affordability strain.
For private lenders, homeowners, and real estate investors across Ontario and Atlantic Canada, this shift changes everything.
At Lendworth, we’re seeing it firsthand — more equity-rich borrowers, tighter cash flow, and increased demand for flexible second mortgages and home equity solutions.
Let’s break down what the numbers really mean.
What Is the CMHC Housing Affordability Composite Index (HACI)?
CMHC’s new Housing Affordability Composite Index (HACI) replaces outdated single-metric gauges that focused mostly on homeownership and ignored renters.
The new index analyzes:
Ownership affordability
Rental affordability
Income trends
Supply vs demand
Population growth
Local market dynamics
This gives a clearer national picture — and the picture is not comforting.
Affordability Is “Recovering” — But Still Near Crisis Levels
According to CMHC Chief Economist Mathieu Laberge:
Affordability has improved slightly since 2023, when it hit historic lows. Ownership conditions have improved modestly, while rental affordability has stabilized.
But here’s the key takeaway:
“Improved” does not mean affordable.
Nationally, homeownership affordability hit its weakest point since the 1990s in Q2 2022. While rates stabilized, home prices remain elevated and income growth hasn’t kept pace.
The most concerning shift?
This crisis is no longer just a Toronto and Vancouver story.
Ottawa, Montréal & Halifax Now Feeling the Heat
During the 2020–2023 pandemic migration wave, remote-enabled buyers left expensive metros and flooded regional markets.
The result:
Rapid price appreciation
Tight supply
Wage growth lagging housing costs
Increased mortgage stress
Markets that were once considered “affordable alternatives” are now experiencing affordability strain comparable to major urban centres.
This is critical for Ontario investors and homeowners outside Toronto.
Rental Markets: A Different Problem, Same Pressure
CMHC’s 2025 Rental Market Report shows:
Vacancy rates rose to 3.1% (from 2.2%)
Record high rental completions
Softer high-end condo rentals in Toronto and Vancouver
But here’s the issue:
Affordable rental stock remains extremely tight.
Luxury units are softening.
Entry-level and low-cost rentals are not.
That creates long-term upward pressure on lower-income renters — many of whom eventually seek home equity loans or second mortgages to consolidate debt or manage cost-of-living pressure.
Millions More Homes Needed by 2030–2035
CMHC modelling indicates Canada still needs millions of additional homes by 2030–2035 to restore anything close to pre-pandemic affordability.
Even if housing starts double.
That supply gap means:
Equity positions remain strong for current homeowners
Entry barriers remain high for new buyers
Demand for alternative lending solutions increases
And that’s exactly what we’re seeing across Ontario.
What This Means for Ontario Homeowners
If you own property in:
You may be equity-rich — but cash-flow tight.
Traditional lenders focus heavily on income ratios, stress tests, and rigid underwriting.
At Lendworth, we focus on equity first.
We are an Ontario private mortgage lender providing:
First mortgages
Second mortgages
Home equity loans
Debt consolidation solutions
Bridge financing
Mortgage renewals when banks say no
We do not rely solely on income qualification.
We lend based on property value and equity position.
Why Demand for Private Mortgages Is Rising in 2026
The CMHC index confirms three realities:
Affordability strain is national
Income growth is lagging housing costs
Supply shortages are long-term
That combination creates:
And when banks tighten — private lending expands.
The Equity Opportunity
If you purchased before 2021, your property may have appreciated significantly.
Even with market cooling, most Ontario homeowners still hold substantial equity cushions.
Instead of selling under pressure, many are using second mortgages strategically to:
Consolidate high-interest debt
Catch up on property taxes
Pay CRA arrears
Fund business operations
Bridge to a refinance
When structured properly, equity can be a powerful financial tool.
The Bottom Line
The CMHC Housing Affordability Composite Index confirms what the market has been signaling:
Canada’s housing crisis is broader, deeper, and more complex than ever.
But for homeowners with equity, there are still solutions.
If your bank says no — that doesn’t mean you’re out of options.
At Lendworth, we provide fast, equity-based approvals across Ontario.
Your Equity Deserves More™.