Mortgage Stress Test
Canada 2026: How the
Qualifying Rate Works
You qualify at the greater of your contract rate plus 2% or 5.25%. Here’s who it applies to, when it doesn’t, and the practical ways to qualify.
Four ways we help you
navigate the stress test.
The qualifying rate is a fixed rule. How you position your file against it is where a broker makes the difference.
Stress-tested budget before you shop
We run your numbers at the qualifying rate — the greater of your contract rate plus 2% or 5.25% — before you make an offer, so your approved amount matches what lenders will actually fund.
Access to 100+ lenders
For files sitting close to the qualifying line, lender choice is decisive. We shop A-lenders, monolines, credit unions and alternative lenders to find the path that actually closes.
Straight-switch guidance at renewal
Since November 21, 2024, straight switches at renewal are exempt from the stress test. We confirm whether your transaction qualifies, then shop all lenders — no re-qualifying at the higher rate.
Every gap-closing lever modelled
Debt paydown, larger down payment, longer amortization, co-applicant — we model each option side by side against your GDS and TDS ratios so you choose with the full picture.
From qualifying rate
to funded mortgage.
Know your rate, check your ratios, close the gap.
That order matters.
Find your qualifying rate
Take the contract rate you're offered, add 2%, and compare the result with 5.25%. The higher number is the rate your income has to support. Our mortgage stress test calculator does the math and shows the mortgage it supports.
Check your ratios at that rate
Lenders plug the qualifying rate into your GDS and TDS ratios. Generally GDS must stay under about 39% and TDS under about 44%. If either one is over, you'll know the gap before a lender tells you.
Close the gap with a broker
We model the levers — from paying down debt and adding to your down payment to a longer amortization, a co-applicant or a different lender type — across 100+ lenders, and show which gets you approved at the lowest real cost.
We can help across
many scenarios.
Tap any situation below to see how we approach it.
If you’re…Your pre-approval came in lower than you expected
Your pre-approval came in lower than you expected
The most common reason: lenders qualify you at the stress-test rate (contract rate + 2% or 5.25%), not the rate you'll actually pay. We re-run your file to show the exact qualifying rate at work, and the levers that close the gap.
Review my fileIf you’re…You want to switch lenders at renewal without re-qualifying
You want to switch lenders at renewal without re-qualifying
Since November 21, 2024, a straight switch — same balance, same amortization, any lender — is exempt from the stress test. We confirm your transaction qualifies, then shop all lenders and present the sharpest rate available.
See switch optionsIf you’re…Your GDS or TDS is above the limit at the qualifying rate
Your GDS or TDS is above the limit at the qualifying rate
Paying off a car loan or credit card can free up more TDS room than you might expect. Extending your amortization lowers the qualifying payment. Adding a co-applicant adds income to the ratios. We model which move costs the least.
Model my ratiosIf you’re…You're self-employed and not all your income counts yet
You're self-employed and not all your income counts yet
Two years of T1 Generals and Notices of Assessment is the standard, but some lenders are more lenient on how they weight your income. Document packaging that makes your full provable income count toward qualifying is where we earn our keep.
See self-employed optionsIf you’re…You're considering a credit union to sidestep the stress test
You're considering a credit union to sidestep the stress test
Provincially regulated credit unions aren't bound by OSFI B-20 and often apply their own qualifying rate. The trade-off is usually a higher rate and fewer products. We compare the real cost against a prime approval so you choose with the full picture.
Compare my optionsIf you’re…The stress test is blocking a refinance
The stress test is blocking a refinance
A refinance at a federally regulated lender is new lending — you re-qualify at the stress-test rate on the new, larger balance. If income or property limits prime options, a B-lender or HELOC path may bridge the gap. We model all of them.
Explore refi pathsHow the qualifying rate
shrinks your budget.
The stress test doesn't change your payment — it changes how much you can borrow.
- Contract rate (illustrative)4.50% fixed
- Rate used to size max mortgage4.50%
- Gross household income$120,000/year
- Simple naïve estimate~$640,000
- What lenders actually approve???
- Unadjusted estimate~$640,000
- Contract rate (illustrative)4.50% fixed
- Qualifying rate (contract + 2%)6.50%
- Gross household income$120,000/year
- GDS / TDS limits≤39% / ≤44%
- Actual maximum mortgage~$530,000
- Lender-approved maximum~$530,000
Illustrative only — based on a $120,000 gross income, 25-year amortization, no other debts. Your qualifying rate, ratios, and maximum mortgage will differ. Run your own numbers.
Who the stress test applies to — and who it doesn't
The stress test follows the type of transaction and the type of lender, not just whether you have a mortgage.
| Situation | Stress test applies? | What it means for you |
|---|---|---|
| Buying with a bank or monoline lender | Yes — insured or uninsured | You qualify at the greater of contract rate + 2% or 5.25%. Plan your budget around that rate, not the one you'll pay. |
| Refinancing with a federally regulated lender | Yes | A refinance is new lending, so your income has to support the new, larger mortgage at the qualifying rate. |
| Straight switch to a new lender at renewal | No — since Nov 21, 2024 | Same balance and same amortization, insured or uninsured. The new lender still reviews credit, income and property — but doesn't qualify you at the stress-test rate. |
| Switching lenders and adding money or extending amortization | Yes | Borrowing more or stretching the amortization is treated as new lending, so you re-qualify at the stress-test rate. |
| Renewing with your current lender | No | Re-qualification isn't required, even if your income or credit has changed. That's useful, but it isn't a reason to skip comparing offers. |
| Provincially regulated credit union | Often no | Not bound by OSFI B-20, so many set their own qualifying rate. Policies vary — confirm with your broker before you rely on an exemption. |
| Private mortgage | No | Private lenders lend mainly on equity rather than stress-tested income, at a higher cost and usually as a short-term bridge with a planned exit. |
Summary of rules as of September 2026. Federal rules and lender policies change — confirm with your broker before you act.
Common questions,
clear answers.
Qualifying rate, GDS/TDS ratios, renewal exemptions, and refinancing — answered plainly.
What is the mortgage stress test rate in Canada for 2026?
You must qualify at the greater of your contract rate plus 2% or 5.25%. For most borrowers, contract rate plus 2% is the binding figure, because the 5.25% floor only applies when a contract rate is below 3.25%. As an illustrative example, a 4.50% contract rate qualifies at 6.50%.
Does the stress test change my mortgage payment?
No. Your contract rate sets your actual payment. The qualifying rate is used only to size how much you can borrow. You can see what your contract rate produces on our mortgage payment calculator.
Do I have to pass the stress test to renew my mortgage?
Not if you renew with your current lender. And since November 21, 2024, not if you make a straight switch to a new lender at renewal with the same balance and the same amortization, insured or uninsured. If you add money or extend the amortization when you switch, you'll qualify at the stress-test rate.
Does the stress test apply to refinancing?
Yes. A refinance with a federally regulated lender is new lending, so you qualify at the greater of your contract rate plus 2% or 5.25% on the new mortgage amount.
Does it apply to both insured and uninsured mortgages?
Yes. The same formula — the greater of your contract rate plus 2% or 5.25% — applies to insured mortgages (under 20% down, through federal mortgage insurance rules) and to uninsured mortgages at federally regulated lenders (through OSFI Guideline B-20).
Can I avoid the stress test?
Not on a purchase or refinance with a federally regulated lender. Provincially regulated credit unions aren't bound by OSFI B-20, and some alternative lenders use their own qualifying standard, often at a higher rate or with fees. Private lenders lend mainly on equity. A broker can tell you which option fits your file and what it really costs — confirm current rules with your broker before you rely on an exemption.
How much does the stress test reduce what I can borrow?
It depends on your rate, income and debts, but qualifying at a rate 2% higher can trim a typical buyer's maximum mortgage by tens of thousands of dollars. The stress test calculator shows the dollar gap for your own numbers.
What is the fastest way to pass the stress test?
Paying down debts with high monthly payments, such as car loans and credit cards, is often the quickest lever because it lowers your TDS ratio right away. A larger down payment, a longer amortization where you're eligible, or adding a co-applicant can also help. The right mix depends on your file.
Why was my pre-approval lower than I expected?
Because lenders qualify you at the stress-test rate, not the rate you'll pay. Your GDS and TDS ratios are calculated at that higher rate, which is the most common reason an approved amount comes in below a simple estimate.
We’ll try to beat your rate.
If we can’t, we pay you $500.¹
¹ Rate Beat: eligible Big-6 bank written offers only · same product, term & amount · $500 paid to you or your nominated charity at closing · conditions apply
Find a stress test specialist in your city
The qualifying rate is the same rule coast to coast — but which lenders are lenient on your file depends on local market knowledge. Find your city's mortgage broker.