What is the mortgage stress test rate in 2026?

The qualifying rate is the higher of your contract rate plus 2 percentage points, or 5.25% (the OSFI minimum qualifying rate floor). At a 5.49% contract rate, you qualify at 7.49%. At a 3.00% contract rate, the floor applies and you qualify at 5.25%.

What is the GDS ratio limit?

The Gross Debt Service (GDS) ratio limit is 39%. GDS is monthly mortgage payment (at the qualifying rate) plus property tax and heating, divided by gross monthly household income. If your GDS exceeds 39%, you do not pass the stress test.

What is the TDS ratio limit?

The Total Debt Service (TDS) ratio limit is 44%. TDS adds all other monthly debt payments (car loans, student loans, credit card minimums) to the GDS amount and divides by gross monthly income. Both GDS and TDS must pass for the mortgage to be approved.

Does the stress test apply to mortgage renewals?

No — mortgage renewals at the same lender are generally exempt from the stress test provided the loan amount does not increase. Switching to a new lender at renewal, or borrowing additional funds, typically requires re-qualification under current stress test rules.

Does the stress test apply if I put 20% down?

Yes. The stress test applies to all mortgages at federally regulated lenders, including both insured (under 20% down) and uninsured (20% or more down) mortgages. The only common exemption is renewal at the existing lender.

How does the stress test reduce my maximum mortgage?

By requiring qualification at a rate 2 percentage points above your contract rate, your maximum monthly payment (which determines the loan amount) is calculated at a higher cost. This typically reduces the maximum mortgage by 15-20% compared to qualifying at the actual contract rate.

Are private lenders subject to the stress test?

No. OSFI Guideline B-20 applies only to federally regulated financial institutions (banks, trust companies). Private lenders, credit unions (regulated provincially), and mortgage investment corporations (MICs) are not required to apply the OSFI stress test, though they may impose their own qualification standards.

What income counts for the GDS/TDS calculation?

Gross employment income is the primary input. Self-employment income (typically averaged over 2 years), investment income, pension income, and rental income (often at 50-80% of gross) can also be counted depending on lender policy and CRA verification. Overtime and bonus income may be averaged or discounted.

Can condo fees affect the stress test?

Yes. Half of the monthly condominium maintenance fee is added to the GDS and TDS numerator alongside mortgage payment, property tax, and heating. A $1,000/month condo fee adds $500 to the monthly obligations used in the ratio calculations.

What is the maximum insurable purchase price in 2026?

As of December 15, 2024, the maximum purchase price eligible for CMHC mortgage insurance is $1.5 million (raised from $1.0 million). Homes priced between $1.0 million and $1.5 million now require a minimum 10% down payment to qualify for CMHC insurance.

What amortization periods are available for insured mortgages?

As of August 2024, insured mortgages are eligible for 30-year amortization periods (extended from 25 years). First-time home buyers and buyers of new construction qualify for the 30-year option. Note that 30-year amortization with CMHC insurance carries a 0.20% premium surcharge.

Mortgage Stress Test Calculator

Test whether you qualify under OSFI B-20 at the stress-tested rate. Uses GDS ≤ 39% and TDS ≤ 44% at the higher of contract rate + 2% or the 5.25% minimum qualifying rate floor.

Reviewed by Ben Stevenson, Editor Updated April 24, 2026 Source OSFI

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The mortgage stress test is a regulatory qualification requirement that determines the maximum mortgage a Canadian borrower can qualify for, based not on the actual contract interest rate but on a higher qualifying rate. The Office of the Superintendent of Financial Institutions (OSFI) mandates the stress test under Guideline B-20 for federally regulated lenders. The Canada Mortgage and Housing Corporation (CMHC) applies an equivalent test for insured mortgages.

Passing the stress test requires that monthly mortgage payments at the qualifying rate — plus property tax and heating costs — do not exceed 39% of gross monthly household income (Gross Debt Service ratio), and that all debt payments combined do not exceed 44% (Total Debt Service ratio).

Quick Answer

As of 2026, the qualifying rate is the greater of your contract rate plus 2 percentage points, or 5.25% (the minimum qualifying rate floor). A borrower with a 4.99% contract rate qualifies using 6.99%. A borrower with a 3.00% contract rate qualifies using 5.25%. Higher qualifying rates reduce the maximum mortgage amount the lender will approve.

Qualifying Rate Formula

Qualifying rate = max(contract rate + 2%, minimum qualifying rate floor)

The minimum qualifying rate floor as of 2026 is 5.25%, set by OSFI and periodically reviewed. When contract rates rise significantly above 3.25%, the contract rate + 2% formula becomes the binding constraint. The floor ensures that even during very low interest rate environments, borrowers prove they could handle higher rates.

GDS and TDS Ratios

Gross Debt Service (GDS) ratio: (Monthly mortgage payment at qualifying rate + monthly property tax + monthly heating) / Gross monthly income. Maximum: 39%.

Total Debt Service (TDS) ratio: (Monthly mortgage payment + property tax + heating + all other monthly debt payments) / Gross monthly income. Maximum: 44%.

Half the monthly condominium fees are also included in the GDS/TDS calculations for condo purchases. Both ratios must pass; whichever is the binding constraint limits the maximum mortgage.

How the Stress Test Affects Borrowing Capacity

Compared to qualifying at the actual contract rate, the stress test typically reduces maximum mortgage amount by 15-20%. For example, at a 4.99% contract rate, qualifying at 6.99% reduces monthly payment capacity, which in turn reduces the principal the bank will lend against a given income. A household that could service a $700,000 mortgage at 4.99% might only qualify for roughly $600,000 at the 6.99% qualifying rate.

Worked Example

A couple with $180,000 combined gross annual income applies for a mortgage on a $850,000 home with $170,000 down payment (20%). Mortgage needed: $680,000. Contract rate: 4.99%. Property tax: $5,000/year. Heating: $2,400/year. Other debts: $600/month.

Qualifying rate: max(4.99% + 2%, 5.25%) = 6.99%
Qualifying monthly payment on $680,000 at 6.99%, 25-year amortization (semi-annual compounding): approximately $4,783/month
Monthly property tax: $417; monthly heating: $200
GDS = ($4,783 + $417 + $200) / ($180,000/12) = $5,400 / $15,000 = 36.0% — passes the 39% limit
TDS = ($5,400 + $600) / $15,000 = 40.0% — passes the 44% limit
Result: Stress test passed. The mortgage is approved.

Impact on Insured vs. Uninsured Mortgages

All mortgages at federally regulated lenders — including insured (CMHC) mortgages for buyers with less than 20% down payment — must pass the stress test. Uninsured mortgages (20%+ down) also use the same stress test. Private lenders not regulated by OSFI are not subject to Guideline B-20, but provincial mortgage broker regulations or lender policies may impose equivalent tests.

Changes Since 2016

Date	Change
October 2016	Stress test introduced for insured mortgages at the posted 5-year rate
January 2018	Extended to all mortgages; new floor = max(contract + 2%, Bank of Canada 5-year posted rate)
June 2021	Floor raised to 5.25% (or contract + 2%, whichever is higher)
2023	30-year amortization introduced for CMHC-insured mortgages on new builds
August 2024	30-year amortization extended to all CMHC-insured mortgages

Edge Cases and Rules

Mortgage renewals at the same lender are generally exempt from the stress test if the loan amount does not increase.
Switching lenders at renewal requires passing the stress test at the new lender.
Insured mortgage maximum purchase price is $1.5 million effective December 15, 2024 (raised from $1 million by the 2024 federal budget).
Rental income from a suite in the home may be partially counted as qualifying income under some lender policies, up to 80-100% of expected rental at some lenders.
GDS/TDS limits can be exceeded slightly (up to 45% TDS) for borrowers with excellent credit under CMHC’s Flex program, at lender discretion.

Frequently asked questions

What is the mortgage stress test rate in 2026?: The qualifying rate is the higher of your contract rate plus 2 percentage points, or 5.25% (the OSFI minimum qualifying rate floor). At a 5.49% contract rate, you qualify at 7.49%. At a 3.00% contract rate, the floor applies and you qualify at 5.25%.
What is the GDS ratio limit?: The Gross Debt Service (GDS) ratio limit is 39%. GDS is monthly mortgage payment (at the qualifying rate) plus property tax and heating, divided by gross monthly household income. If your GDS exceeds 39%, you do not pass the stress test.
What is the TDS ratio limit?: The Total Debt Service (TDS) ratio limit is 44%. TDS adds all other monthly debt payments (car loans, student loans, credit card minimums) to the GDS amount and divides by gross monthly income. Both GDS and TDS must pass for the mortgage to be approved.
Does the stress test apply to mortgage renewals?: No — mortgage renewals at the same lender are generally exempt from the stress test provided the loan amount does not increase. Switching to a new lender at renewal, or borrowing additional funds, typically requires re-qualification under current stress test rules.
Does the stress test apply if I put 20% down?: Yes. The stress test applies to all mortgages at federally regulated lenders, including both insured (under 20% down) and uninsured (20% or more down) mortgages. The only common exemption is renewal at the existing lender.
How does the stress test reduce my maximum mortgage?: By requiring qualification at a rate 2 percentage points above your contract rate, your maximum monthly payment (which determines the loan amount) is calculated at a higher cost. This typically reduces the maximum mortgage by 15-20% compared to qualifying at the actual contract rate.
Are private lenders subject to the stress test?: No. OSFI Guideline B-20 applies only to federally regulated financial institutions (banks, trust companies). Private lenders, credit unions (regulated provincially), and mortgage investment corporations (MICs) are not required to apply the OSFI stress test, though they may impose their own qualification standards.
What income counts for the GDS/TDS calculation?: Gross employment income is the primary input. Self-employment income (typically averaged over 2 years), investment income, pension income, and rental income (often at 50-80% of gross) can also be counted depending on lender policy and CRA verification. Overtime and bonus income may be averaged or discounted.
Can condo fees affect the stress test?: Yes. Half of the monthly condominium maintenance fee is added to the GDS and TDS numerator alongside mortgage payment, property tax, and heating. A $1,000/month condo fee adds $500 to the monthly obligations used in the ratio calculations.
What is the maximum insurable purchase price in 2026?: As of December 15, 2024, the maximum purchase price eligible for CMHC mortgage insurance is $1.5 million (raised from $1.0 million). Homes priced between $1.0 million and $1.5 million now require a minimum 10% down payment to qualify for CMHC insurance.
What amortization periods are available for insured mortgages?: As of August 2024, insured mortgages are eligible for 30-year amortization periods (extended from 25 years). First-time home buyers and buyers of new construction qualify for the 30-year option. Note that 30-year amortization with CMHC insurance carries a 0.20% premium surcharge.

Methodology

Qualifying rate = max(contract rate + 2 pp, 5.25% floor), per OSFI B-20. Monthly payment uses Canadian semi-annual compounding formula. GDS = (qualifying payment + property tax/12 + heat/12) / (income/12); TDS adds other monthly debts. Limits: GDS 39%, TDS 44%.

Frequently asked questions

What is the mortgage stress test rate in 2026?: The qualifying rate is the higher of your contract rate plus 2 percentage points, or 5.25% (the OSFI minimum qualifying rate floor). At a 5.49% contract rate, you qualify at 7.49%. At a 3.00% contract rate, the floor applies and you qualify at 5.25%.
What is the GDS ratio limit?: The Gross Debt Service (GDS) ratio limit is 39%. GDS is monthly mortgage payment (at the qualifying rate) plus property tax and heating, divided by gross monthly household income. If your GDS exceeds 39%, you do not pass the stress test.
What is the TDS ratio limit?: The Total Debt Service (TDS) ratio limit is 44%. TDS adds all other monthly debt payments (car loans, student loans, credit card minimums) to the GDS amount and divides by gross monthly income. Both GDS and TDS must pass for the mortgage to be approved.
Does the stress test apply to mortgage renewals?: No — mortgage renewals at the same lender are generally exempt from the stress test provided the loan amount does not increase. Switching to a new lender at renewal, or borrowing additional funds, typically requires re-qualification under current stress test rules.
Does the stress test apply if I put 20% down?: Yes. The stress test applies to all mortgages at federally regulated lenders, including both insured (under 20% down) and uninsured (20% or more down) mortgages. The only common exemption is renewal at the existing lender.
How does the stress test reduce my maximum mortgage?: By requiring qualification at a rate 2 percentage points above your contract rate, your maximum monthly payment (which determines the loan amount) is calculated at a higher cost. This typically reduces the maximum mortgage by 15-20% compared to qualifying at the actual contract rate.
Are private lenders subject to the stress test?: No. OSFI Guideline B-20 applies only to federally regulated financial institutions (banks, trust companies). Private lenders, credit unions (regulated provincially), and mortgage investment corporations (MICs) are not required to apply the OSFI stress test, though they may impose their own qualification standards.
What income counts for the GDS/TDS calculation?: Gross employment income is the primary input. Self-employment income (typically averaged over 2 years), investment income, pension income, and rental income (often at 50-80% of gross) can also be counted depending on lender policy and CRA verification. Overtime and bonus income may be averaged or discounted.
Can condo fees affect the stress test?: Yes. Half of the monthly condominium maintenance fee is added to the GDS and TDS numerator alongside mortgage payment, property tax, and heating. A $1,000/month condo fee adds $500 to the monthly obligations used in the ratio calculations.
What is the maximum insurable purchase price in 2026?: As of December 15, 2024, the maximum purchase price eligible for CMHC mortgage insurance is $1.5 million (raised from $1.0 million). Homes priced between $1.0 million and $1.5 million now require a minimum 10% down payment to qualify for CMHC insurance.
What amortization periods are available for insured mortgages?: As of August 2024, insured mortgages are eligible for 30-year amortization periods (extended from 25 years). First-time home buyers and buyers of new construction qualify for the 30-year option. Note that 30-year amortization with CMHC insurance carries a 0.20% premium surcharge.