Mortgage stress test calculator
Compare your contract-rate payment against the OSFI Guideline B-20 qualifying rate (the higher of contract + 2% or 5.25%). Federal — same nationwide.
Your scenario
Stress-test impact
What is the Canadian mortgage stress test?
The OSFI Guideline B-20 stress test requires federally regulated lenders to qualify residential borrowers at the higher of contract rate plus 2% or a 5.25% floor. The rule applies to insured AND uninsured mortgages, refinances, and switches to a new lender at renewal. The rule has been in place since 2018.
The formula in one line
Qualifying rate = max(contract rate + 2%, 5.25%)
If your contract rate is 4.84%, you qualify at 6.84%. If your contract rate is 3.0%, you qualify at 5.25% (the floor binds). If contract is 7.99%, you qualify at 9.99%.
Why it exists
Mortgage rates in Canada are typically locked for 5 years. The stress test ensures you can still afford the payment if rates rise meaningfully when you renew. The 2-point cushion was calibrated to roughly approximate the difference between a low-point fixed rate and the rate you might face 5 years later in a normal rate cycle.
The downside: it limits how much house you qualify for today. Most Canadian buyers qualify for ~20% less mortgage than their contract-rate payment would suggest. That gap is the point — the trade-off is intentional.
When the stress test applies
- New mortgage purchases — every federally regulated bank deal
- Refinances — even at the same lender if you're increasing the mortgage
- Switches to a new lender at renewal — yes, even a straight switch with no new money triggers stress test
- Insured AND uninsured mortgages — same rule both ways
- Investment property mortgages with federally regulated lenders
When the stress test does NOT apply
- Renewal at the same lender — no new origination, no stress test re-application
- Private lenders — not federally regulated, use their own qualification
- Provincial credit unions (BC, ON, AB) — provincially regulated, can choose to skip B-20
- Some commercial mortgages on multi-residential (5+ units)
Payment shock — the practical impact
A $720,000 mortgage at 4.84% contract, 25-year amortization:
- Contract-rate payment: ~$4,118 / month
- Qualifying rate (6.84%): ~$4,990 / month
- Shock if rates renew at qualifying: +$870 / month (21%)
You only ever pay the contract rate while it's in effect — but you have to prove you could carry the qualifying-rate payment. That's the test.
How to lift your stress-test ceiling
- Bigger down payment — reduces the mortgage amount, so the qualifying-rate payment is smaller
- Pay down other debts — frees up TDS room (every $300/month of debt costs ~$50k of qualifying mortgage)
- Add a co-signer — see co-signer impact; combined income gets stress-tested as one
- Consider a credit union — provincially regulated credit unions may have looser overlays
- Renew at the same lender instead of switching — no re-stress, even if rates have risen
Will the stress test rules change?
OSFI reviews the rule periodically. The 5.25% floor was set in 2021 and hasn't moved since. There's ongoing debate about whether to ease the test for renewals (so people switching lenders aren't penalized) — but no policy change has been confirmed. Plan for the current rules.
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Questions about this calculator
- What is the mortgage stress test?
- It is a federal rule requiring lenders to qualify you at a rate higher than the one you will actually pay — the greater of a published minimum qualifying rate or your contract rate plus a set buffer. It applies to federally regulated lenders across Canada, so it does not vary by province.
- Does the stress test apply at renewal?
- Not if you renew with your existing lender on a straight renewal. It does apply if you switch lenders, which is the reason some borrowers stay put on a worse rate. Confirm the current rules with your broker before assuming either way, since this has been revisited more than once.
- Can I avoid the stress test?
- Provincially regulated credit unions and private lenders are not bound by the federal rule, and some apply their own. That flexibility is priced in — you generally pay a higher rate, and often lender or broker fees, for a qualification standard the federally regulated lenders will not offer.
- Does the stress test change what I actually pay?
- No. It only changes the size of the mortgage you are approved for. Your payment is calculated on your real contract rate; the stress test is a qualification hurdle, not a payment.