Editor's note, October 6, 2026: this article was reviewed and rewritten in our accuracy check. An earlier version contained a 'January 2026 review' with investor, foreign-income and construction-loan changes that did not happen, and lender rates, approval amounts and switching statistics we could not source; they have been removed or replaced with figures from the sources listed at the end of the article.
The mortgage stress test sets the interest rate a lender must use to check whether you can afford your mortgage. You must qualify at the greater of 5.25% or your contract rate plus 2 percentage points. OSFI sets this minimum qualifying rate for uninsured mortgages at federally regulated lenders, and the same test applies to insured mortgages (less than 20% down). OSFI reviews the rate at least once a year and has left it unchanged.
How it works
The lender works out your housing costs at the qualifying rate, not your actual rate, and compares them with your income:
- Gross debt service (GDS): mortgage payment, property tax, heat and half of any condo fees, as a share of gross income. CMHC's limit for insured mortgages is 39%.
- Total debt service (TDS): the same plus your other debt payments. CMHC's limit is 44%.
Examples: at a contract rate of 3.9% you qualify at 5.9%; at 3.0% you qualify at the 5.25% floor.
What it means for your budget
Because the qualifying rate is higher than the rate you will pay, the test lowers the largest mortgage you can get. It also means a lower rate improves your qualifying amount only once the contract rate is above 3.25%; below that, the 5.25% floor applies. Our affordability calculator applies the test with the GDS and TDS limits above.
Renewals and switching lenders
- Renewing with your current lender: no new stress test.
- Switching lenders at renewal (uninsured): since November 21, 2024, OSFI exempts a straight switch (same loan amount and amortization) from the minimum qualifying rate.
- Insured mortgages have not needed to re-qualify for a straight switch at renewal since early 2024.
- Refinancing or borrowing more means qualifying again.
If your lender is federally regulated, it must send a renewal statement at least 21 days before your term ends. Start shopping well before that; see our renewal guide.
Ways to improve how much you qualify for, within the rules
- Pay down other debts: every monthly payment you remove lowers your TDS.
- A longer amortization lowers the payment: 25 years is the maximum on an insured mortgage, or 30 for first-time buyers and buyers of a new build; with 20% or more down the lender sets the maximum.
- Add a co-borrower whose income counts toward the application.
- Compare lenders: within the rules, lenders differ in how they treat things like rental or self-employed income.
Frequently asked questions
Does the stress test apply with 20% or more down?
Yes, at federally regulated lenders: OSFI's minimum qualifying rate is for uninsured mortgages.
Do credit unions apply it?
Provincially regulated lenders, such as Ontario credit unions, are not bound by OSFI's guideline and set their own qualifying policies; many use a similar test.
Can a private lender skip it?
Private lenders are not bound by OSFI's guideline, but they usually charge higher rates and fees for shorter terms. See when a private mortgage makes sense.
Does the stress test change with the Bank of Canada's rate?
Indirectly. The floor (5.25%) and buffer (2 points) are set by OSFI, not the Bank of Canada. If lower policy rates bring contract rates down, your qualifying rate falls too, until it hits the floor.
Questions about your numbers? Get pre-qualified or ask Zara, Summitly's AI virtual agent. Mortgage financing is arranged through our partner, Mortgage Squad Advisors.
