June 8, 2026
Introduction
CMHC has updated its operating-expense benchmarks for the 2025-26 program year. Most expense lines moved up. The practical effect is that underwritten value and borrowing capacity come down modestly even when your building, your rents, and your actual costs are unchanged, because CMHC sizes loans against benchmark expenses, not only your real ones.
This briefing summarizes what changed, who is most affected, and how to estimate the impact on a specific file. In keeping with CMHC’s wishes, it shows only the movement in benchmarked expenses and the resulting impact, not the benchmark figures themselves.
Debt impact ≈ Δ$/unit × 19 × your units.
What Changed
- Repairs & maintenance (R&M) rose everywhere. Wood frame +$90/unit (Atlantic & Québec) or +$110/unit (Ontario, Prairies, BC); concrete +$105/unit (Atlantic) or +$115/unit (all other regions).
- Wood-frame management rose by 0.25 points of EGI in most regions. Québec wood frame 12+ and all concrete management are unchanged.
- Salaries rose across all regions and building types, by roughly +$35 to +$70/unit.
- The elevator reserve rose $15/elevator/month. The method is unchanged, still charged per elevator, not per unit.
- “Other costs” were harmonized. This line falls for Prairies and BC files (a partial offset). Québec’s “other costs” were previously inside R&M and are now a separate line equal to 1% of EGI.
What You Should Do
- Have a live file? Ask us to re-run it on the new benchmarks before you submit to CMHC.
- Planning a purchase or build? We’ll model the new figures from the outset.
- No active file? Keep this in mind for your next deal.
Per-Unit Impact: Quick Reference
Find your building type and region below. Value/unit and debt/unit are the reductions at a 5.00% cap rate and 95% LTV. These are movements only; no benchmark figures are shown.
| Building type / Region | Δ $/unit/yr | Δ % | Value/unit | Debt/unit |
|---|---|---|---|---|
| Wood frame ≤11 | ||||
| Ontario | +$210 | +9.0% | −$4K | −$4K |
| Atlantic | +$175 | +8.9% | −$4K | −$3K |
| Prairies | +$25 | +1.0% | −$500 | −$475 |
| BC | +$94 | +3.7% | −$2K | −$2K |
| Québec | +$350 | +22.0% | −$7K | −$7K |
| Wood frame 12+ | ||||
| Ontario | +$210 | +9.0% | −$4K | −$4K |
| Atlantic | +$175 | +8.9% | −$4K | −$3K |
| Prairies | +$25 | +1.0% | −$500 | −$475 |
| BC | +$94 | +3.7% | −$2K | −$2K |
| Québec | +$305 | +16.3% | −$6K | −$6K |
| Concrete | ||||
| Ontario | +$185 | +7.1% | −$4K | −$4K |
| Atlantic | +$111 | +4.6% | −$2K | −$2K |
| Prairies | +$0 | +0.0% | $0 | $0 |
| BC | +$41 | +1.5% | −$820 | −$779 |
| Québec | +$355 | +14.6% | −$7K | −$7K |
Figures use $18,000 EGI/unit (≈ $1,500/month). Management and “other” scale with your actual EGI: see “Estimate Your Own Impact” below.
Estimate Your Own Impact
Four steps
- Look up the fixed and EGI-linked movement (table below).
- Δ$/unit × units = annual NOI drop.
- NOI drop ÷ cap rate = value drop.
- Value drop × LTV = debt drop.
Your EGI per unit
≈ monthly rent × 12 × (1 − vacancy %). E.g. $1,500/month at 3% vacancy ≈ $17,460/unit/year.
The shortcut
At a 5.00% cap and 95% LTV, a $1/unit rise ≈ $19/unit less borrowing capacity.
DSCR note
These steps assume LTV limits your loan. On stabilized buildings DSCR often binds instead, and the loan moves with NOI ÷ DSCR. We confirm which applies on every file.
| Building type / Region | Fixed Δ ($/unit) | EGI-linked Δ (pts of EGI) |
|---|---|---|
| Wood frame ≤11 | ||
| Ontario | +$165 | +0.25 pts |
| Atlantic | +$130 | +0.25 pts |
| Prairies | +$160 | −0.75 pts |
| BC | +$175 | −0.45 pts |
| Québec | +$125 | +1.25 pts |
| Wood frame 12+ | ||
| Ontario | +$165 | +0.25 pts |
| Atlantic | +$130 | +0.25 pts |
| Prairies | +$160 | −0.75 pts |
| BC | +$175 | −0.45 pts |
| Québec | +$125 | +1.00 pts |
| Concrete | ||
| Ontario | +$185 | no change |
| Atlantic | +$165 | −0.30 pts |
| Prairies | +$180 | −1.00 pts |
| BC | +$185 | −0.80 pts |
| Québec | +$175 | +1.00 pts |
Portfolio-Scale Impact: Borrowing Capacity by Loan Size
The per-unit movement compounds with deal size. The table below shows the reduction in borrowing capacity the 2025-26 benchmarks create across typical loan sizes, by region and building type.
Impact as a % of loan = Δ$/unit ÷ NOI per unit, anchored at $12,500 NOI/unit (≈ $250,000 value/unit at a 5.00% cap). Impact scales linearly with deal size and is independent of LTV; lower-value markets see a larger % impact, so these are a mid-market guide.
| Region | % of loan | $2.5M | $5M | $10M | $20M | $50M | $100M |
|---|---|---|---|---|---|---|---|
| Wood frame ≤11 | |||||||
| Ontario | 1.68% | −$42K | −$84K | −$168K | −$336K | −$840K | −$1.68M |
| Atlantic | 1.40% | −$35K | −$70K | −$140K | −$280K | −$700K | −$1.40M |
| Prairies | 0.20% | −$5K | −$10K | −$20K | −$40K | −$100K | −$200K |
| BC | 0.75% | −$19K | −$38K | −$75K | −$150K | −$376K | −$752K |
| Québec | 2.80% | −$70K | −$140K | −$280K | −$560K | −$1.40M | −$2.80M |
| Wood frame 12+ | |||||||
| Ontario | 1.68% | −$42K | −$84K | −$168K | −$336K | −$840K | −$1.68M |
| Atlantic | 1.40% | −$35K | −$70K | −$140K | −$280K | −$700K | −$1.40M |
| Prairies | 0.20% | −$5K | −$10K | −$20K | −$40K | −$100K | −$200K |
| BC | 0.75% | −$19K | −$38K | −$75K | −$150K | −$376K | −$752K |
| Québec | 2.44% | −$61K | −$122K | −$244K | −$488K | −$1.22M | −$2.44M |
| Concrete | |||||||
| Ontario | 1.48% | −$37K | −$74K | −$148K | −$296K | −$740K | −$1.48M |
| Atlantic | 0.89% | −$22K | −$44K | −$89K | −$178K | −$444K | −$888K |
| Prairies | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 |
| BC | 0.33% | −$8K | −$16K | −$33K | −$66K | −$164K | −$328K |
| Québec | 2.84% | −$71K | −$142K | −$284K | −$568K | −$1.42M | −$2.84M |
Example: a $20M Québec concrete portfolio loses roughly $568K of borrowing capacity (2.84% of the loan) purely from the benchmark change. A $20M Prairies concrete portfolio loses nothing (0.0%).
Worked Example
A 20-unit Ontario wood-frame (12+) building at $1,600/month and 3% vacancy:
Frequently Asked Questions
Do these benchmarks affect my existing CMHC loan?
No. An already-closed insured loan is unaffected. The benchmarks apply to new applications and analyses submitted under the 2025-26 program year: purchases, refinances, construction take-outs, and renewals needing fresh underwriting.
My actual costs are lower than the benchmark. Can CMHC use my real numbers?
For repairs, management, salaries, and reserves, CMHC underwrites to the greater of your actuals or the benchmark, so the benchmark acts as a floor. Taxes, insurance, and utilities use your actual figures.
Why does this rise if my building is new and efficient?
Benchmarks reflect typical costs for an average building of that type, size, and region, not your specific building. Efficient design helps most through the MLI Select points system, not through lower underwritten expenses.
Which of my deals are most affected?
In percentage terms, Québec assets and smaller wood-frame buildings see the largest moves. In absolute dollars, large concrete buildings feel it most, because the per-unit increase multiplies across many units.
Is there any good news?
Yes. The “other costs” harmonization lowers that line for Prairies and BC files, partially offsetting the R&M and salary increases.
Do I need to do anything right now?
If you have an active file, let us re-underwrite it on the new benchmarks before submission. Otherwise, no action is needed; keep it in mind for your next deal.
We’re Here to Help
Every property is different, and the only number that matters is the one on your specific file. If you’d like us to re-run a current deal, model a prospective acquisition, or talk through how the 2025-26 benchmarks change your strategy, reach out to your 4Capital advisor any time. We’ll give you the exact figures, show our work, and flag the binding constraint so you know precisely where you stand.
In keeping with CMHC’s wishes, this briefing shows only the movement in benchmarked expenses and the resulting impact, not the benchmark figures themselves. It is provided for general information and discussion only and does not constitute a commitment to lend, financial advice, or a guarantee of CMHC approval. Figures isolate the benchmark change before the Prairies/BC “other” offset is applied. All figures are in Canadian dollars; your file will differ.