What does the Canadian stress test do to your payment?
Federally regulated lenders qualify you at the greater of your contract rate +2% or 5.25%. Here's the payment a lender will actually use to size your file.
The mortgage stress test qualifies you at the greater of your contract rate +2% or 5.25% — so a 4.39% offer is tested at 6.39%. That higher qualifying payment, not your real one, sets your maximum mortgage. Enter your rate, income and debts above to see the payment a lender will actually use — and note several credit unions qualify on your contract rate instead.
Your inputs
What the stress test costs your borrowing power
The $3,241/mo your contract rate produces carries a far smaller mortgage once a lender re-prices it at the 5.94% qualifying rate.
Lender-ready summary, your assumptions baked in, and a personalized note from an advisor at Mortgage Squad Advisors.
Why the stress test exists — and why the gap appears
The Canadian mortgage stress test comes from OSFI Guideline B-20, the rulebook every federally regulated lender follows. It forces lenders to qualify you at the greater of your contract rate +2% or 5.25%, even though your actual payments are based on the lower contract rate. The point is resilience: if rates climb at renewal, you should still be able to carry the loan.
The borrowing-power gap above appears because a higher qualifying rate means more of every hypothetical payment is treated as interest, so the same dollar budget supports a smaller principal. That is the mechanism that shrinks your maximum mortgage by roughly 18% on this file — not your real payment, which never changes.
You can sometimes close the gap: provincial credit unions are not bound by B-20 and may qualify at contract rate, and a larger down payment or lower other debt frees up room. See how it flows through to a full purchase budget on our affordability calculator, or the income behind it on our income-required calculator.