Mortgage Stress Test Calculator

Who this calculator is for

Use it when you want a fast yes/no on the federal-style stress test: salaried buyers getting pre-approved, couples combining income, and homeowners who might refinance or switch at renewal. It is not a credit decision. Lenders still verify employment, down-payment source, credit score, and property type.

If you already know the mortgage size, start here. If you do not, use the affordability calculator first, then come back. Compare the contract rate you type in against current 5-year fixed rates or variable rates.

How the qualifying rate is calculated

OSFI requires federally regulated lenders to qualify most uninsured mortgages at the greater of:

• Contract rate + 2 percentage points, or
• the Bank of Canada five-year conventional mortgage rate (this calculator’s floor is 5.25%).

Example: a 4.50% contract rate is tested at 6.50% (4.50 + 2), because 6.50 is higher than 5.25. A 3.10% contract rate is tested at 5.25%, because the floor is higher than 5.10%. The monthly payment shown in the results is the qualifying payment, which is higher than the payment you would actually write each month.

The 5.25% floor is the value built into this tool. The Bank of Canada series can move; lenders may update their qualifying rate when that published rate changes. Treat a result near the 39% / 44% limits as a yellow light, not a guarantee.

GDS and TDS, in plain terms

Most lenders count 50% of condo fees in GDS. This calculator includes the full condo fee, so a condo purchase may look slightly harder to qualify here than on a bank worksheet. Heating is a required housing cost even if it is bundled; the default $100 is a planning figure, not your utility bill.

Who has to pass—and who might not

• Big banks and other OSFI-regulated lenders (for example TD and Manulife Bank) apply the federal test on new purchases and refinances.
• High-ratio (insured) mortgages must satisfy the insurer as well. Compare insured rates after you know the premium from the CMHC calculator.
• Same-lender renewals usually skip a new stress test. Shopping the renewal to a new lender brings it back.
• Some provincial credit unions and private lenders use different qualification. ATB Financial is Alberta-based and provincially regulated; insured deals still have to meet insurer rules.

How the mortgage stress test works in Canada

Canada’s mortgage stress test checks whether you could still carry the loan if the interest rate were higher than the one on your offer. You make your payments at the contract rate. The higher rate is used only to calculate the payment that goes into your gross debt service (GDS) and total debt service (TDS) ratios.

Federally regulated lenders — the big banks, most other Schedule I banks, and federally regulated trust and loan companies — must apply this test to new mortgages and to refinances. Insured mortgages (generally less than 20% down, covered by CMHC, Sagen, or Canada Guaranty) follow the same qualifying-rate idea through the insurer rules, even when the lender itself is not regulated by OSFI.

Two ratios do the work. GDS is housing costs divided by gross monthly income. This calculator counts the qualifying mortgage payment, property tax, heating, and the full condo fee. Many lender worksheets count only half of condo fees, so a condo can look slightly harder here than on a bank form. TDS adds other monthly obligations: car loans, student loans, lines of credit, and credit-card minimums. The caps in this tool are 39% GDS and 44% TDS, which match the common insured-mortgage guidelines. Uninsured files at a bank are still stress-tested; the exact ratio ceiling is that lender’s policy and is often in the same neighbourhood.

Staying with your current lender at renewal usually does not require a new stress test. Switching lenders at renewal does, because the new lender treats it as a new origination. That is why a slightly higher renewal offer from your own bank can still be the practical choice if you would not qualify elsewhere.

The current qualifying-rate rule

The qualifying rate in this calculator is the greater of your contract rate plus 2 percentage points, or 5.25%. That is the minimum qualifying rate (often called the stress test or, informally, the pressure test) that has applied to both insured and uninsured mortgages since the June 2021 change by the Department of Finance and OSFI. It is not the Bank of Canada overnight rate, and it is not your lender’s prime rate. Prime moves when the overnight rate moves; the 5.25% floor does not.

A contract rate of 4.50% is tested at 6.50%, because 4.50% + 2 is 6.50%, which is above the 5.25% floor. A contract rate of 3.10% is tested at 5.25%, because 3.10% + 2 is only 5.10%, and the floor is higher. Variable-rate borrowers are tested the same way: the discount to prime does not lower the qualifying rate.

If the published benchmark later moves, lenders update the floor they use. This page’s calculator is built with a 5.25% floor. Treat a result that sits within a point or two of 39% or 44% as a warning to confirm income treatment (overtime, bonus, self-employment) with the lender before you waive conditions.

Worked example with real numbers

This example uses the same monthly payment formula as the calculator above. The 4.50% contract rate is an illustration, not a rate from today’s lender scrape.

Mortgage $480,000, amortized over 25 years. At the contract rate the payment would be about $2,668 a month. The qualifying rate is 6.50%, so the payment used for GDS and TDS is about $3,241 a month. Add property tax of $350 and heating of $150. Housing costs for the test are $3,741.

Gross household income is $145,000 a year, or $12,083 a month. Other debts are $400 a month. GDS is 31.0% and TDS is 34.3%. Against the 39% and 44% caps used here, this file passes. Changing the down payment, the price, or the other debts moves the ratios; the contract payment itself does not, because the test ignores it.

Run the same inputs in the form above if you want to change one assumption at a time. Then compare a real contract rate from the 5-year fixed or variable tables instead of the 4.50% illustration.

Province notes

The qualifying-rate math is federal. No province publishes its own stress-test percentage. What changes by province is which lender has to follow OSFI, and which closing costs sit beside the mortgage.

Banks such as TD, RBC, Scotiabank, BMO, CIBC, and National Bank apply the federal test on new purchases and refinances in every province they lend in. Manulife Bank is also federally regulated. Insured mortgages must meet insurer qualifying rules nationwide, including files booked at a credit union.

Provincial credit unions are not OSFI-regulated. Vancity and Coast Capital in British Columbia, Meridian in Ontario, and many smaller credit unions can set their own policy on uninsured mortgages. ATB Financial is owned by the Province of Alberta and is in the same position: insured files still face the insurer test; uninsured files follow ATB’s own rules. Ask which qualifying rate they will actually use, and use this calculator as the conservative check.

Quebec purchases still use the federal test at a bank, and the welcome tax (droits de mutation) is a closing cost rather than a qualification rule. Alberta and Saskatchewan have no provincial land transfer tax, which lowers cash to close but does not change GDS. Ontario and Toronto transfer taxes, and B.C. property transfer tax, belong in the closing costs calculator and the land transfer tax calculator, not in the stress-test rate.

Frequently Asked Questions