Qualify with room to spare.
Mortgage Stress Test Calculator
Canadian lenders must qualify you at a higher rate than you'll actually pay. See your qualifying rate, your stress-tested payment, and the household income you'd need to pass.
Your qualifying rate
Greater of 5.25% or your rate + 2%
Since 2018, federally regulated lenders must qualify every borrower at a qualifying rate — not the rate you'll actually pay. The qualifying rate is the greater of 5.25% or your contract rate plus two percentage points. This buffer proves you could still make your payments if interest rates climbed during your term, protecting both you and the lender from payment shock at renewal.
The two ratios lenders check
Once your stress-tested payment is set, lenders measure it against two limits. Your Gross Debt Service (GDS) ratio — mortgage payment, property tax, and heat — should stay at or below roughly 39% of gross income. Your Total Debt Service (TDS) ratio, which adds car loans, credit cards, and other obligations, should stay at or below about 44%. You need to satisfy both; the more other debt you carry, the more income you'll need to pass.
A worked example
Take a $500,000 mortgage offered at 4.49% over 25 years. Your actual payment is about $2,776 a month, but the lender tests you at 6.49% — pushing the qualifying payment to roughly $3,373. Add property tax and heat, and you'd need a household income in the range of $119,000 just to clear the GDS test. That gap between your real payment and your qualifying payment is exactly what the stress test is measuring. Enter your own figures above to see yours.
If you're close to the limit
If the income required looks out of reach, you have levers: pay down high-interest debt to free up your TDS room, grow your down payment so you borrow less, extend the amortization to lower the qualifying payment, or add a co-borrower. The income figure above reflects the GDS test alone — if you carry other debts, use our affordability calculator to fold those into the full TDS picture.
Frequently asked questions
What is the mortgage stress test in Canada?
The stress test is a federal rule that requires lenders to qualify you at a higher 'qualifying rate' than the rate you'll actually pay. The qualifying rate is the greater of 5.25% or your contract rate plus two percentage points. It exists to prove you could still afford your payments if interest rates rose during your term — a buffer against payment shock.
What is the current mortgage stress test rate?
You must qualify at the higher of 5.25% (the minimum qualifying rate set by federal regulators) or your contract rate plus two percentage points. For example, a 4.5% contract rate is stress-tested at 6.5%, while a 3.0% rate is still tested at the 5.25% floor. The calculator above applies whichever figure is higher to your numbers automatically.
Does the stress test apply to mortgage renewals?
If you renew with your current lender, you generally do not need to re-pass the stress test. But if you switch lenders at renewal to chase a better rate, the new lender will usually re-apply the full stress test to your application — which is why some borrowers stay put even when a slightly lower rate is available elsewhere.
Who has to pass the mortgage stress test?
Every borrower at a federally regulated lender — which includes the major banks — must pass it, whether your down payment is under 20% (insured) or 20% or more (uninsured). Some provincially regulated credit unions are not bound by the federal rule, so they can occasionally offer more flexibility, though most apply a similar test of their own.
How can I pass the stress test more easily?
You can improve your odds by paying down high-interest debt to lower your TDS ratio, increasing your down payment so you borrow less, extending the amortization to reduce the qualifying payment, or adding a co-borrower's income. Choosing a lender with a lower contract rate also lowers the rate-plus-two figure you're tested against.
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