Key Takeaways
– The mortgage stress test qualifies you at the higher of your contract rate plus 2%, or 5.25% — at today’s rates, that means ~6.2%.
– At $130,000 household income, the stress test reduces your maximum mortgage by roughly $100,000–$130,000 compared to qualifying at your actual rate.
– OSFI removed the stress test for borrowers switching lenders at renewal (same loan amount, same amortization) — this has been law since 2025.
– The 5.25% floor only becomes the operative rate if contract rates fall below 3.25%; today, contract + 2% is the binding constraint.
– Four strategies can meaningfully increase your qualifying amount without changing your income.
The Mortgage Stress Test Canada 2026
At $130,000 household income, the mortgage stress test cuts your maximum mortgage by roughly $100,000 to $130,000 compared to qualifying at the rate you’ll actually pay.
The rule: qualify at the higher of (a) contract rate + 2%, or (b) 5.25%. With best insured 5-year fixed at 4.04% (June 2026), the qualifying rate is 6.04% — not 5.25%.
Key 2025 change: OSFI removed the stress test for borrowers switching lenders at renewal (same loan amount, same amortization). Still applies to new purchases, refinances, and increases.
Four strategies to qualify for more: (1) 30-year amortization (+8-10% buying power for first-time buyers), (2) pay down existing debt, (3) add a co-borrower, (4) use a broker to get the best insured rate — lower contract rate = lower stress test rate.
See also: Kelowna mortgage broker | mortgage pre-approval Kelowna | first-time buyer guide BC