What is the stress test?
Most Canadian mortgages from federally regulated lenders require you to qualify at a rate higher than the one you'll actually pay. This is called the minimum qualifying rate, or "stress test". It is designed to make sure you could still afford your payments if rates rise.
How it affects you
Because lenders calculate your debt ratios at the higher qualifying rate, the stress test can reduce the maximum amount you're approved for. The exact qualifying rate is set by federal rules and can change, so we always confirm the current requirement when we review your file.
Ways to plan around it
- Reduce other monthly debts before applying, where possible.
- Consider a larger down payment or a co-applicant.
- Compare lenders. Rules and policies differ between banks, credit unions and other lenders.
Every situation is different. We'll show you what you may qualify for across the lenders we work with.
This article is general information only and is not financial, legal or tax advice. Mortgage rules, rates, products and fees change and are subject to lender approval and individual circumstances. Speak with a licensed mortgage professional about your situation.