Mortgage stress test: the minimum qualifying rate
A mortgage stress test assesses affordability at a qualifying rate above the offered contract rate in some cases. Qualifying does not set the interest rate charged.
- Qualifying rate
- The greater of 5.25% or the contract rate plus 2 percentage points.FCAC, mortgage stress test
- Scope
- FCAC states the stress test applies to insured and uninsured mortgages.FCAC, mortgage stress test
Insured and uninsured mortgages
The Department of Finance states that insured mortgages use the greater of the mortgage contract rate plus a buffer of 2 percentage points or a floor of 5.25%. The qualifying rate assesses affordability; it is not the rate charged on the mortgage. Department of Finance, insured mortgage qualifying rate (opens in a new tab).
OSFI’s uninsured rule and limits
OSFI publishes the same minimum qualifying rate for uninsured mortgages at federally regulated lenders: the greater of the contract rate plus 2 percentage points or 5.25%. This general explanation does not determine borrowing capacity, approval, insurance eligibility or renewal exceptions. Lender underwriting conditions also apply. OSFI, uninsured mortgage qualifying rate (opens in a new tab).