Before a lender approves a mortgage, it checks that you could still make the payments if interest rates were higher. That check is the stress test. It comes from OSFI’s Guideline B-20, which requires lenders to qualify uninsured mortgages at the higher of the benchmark rate or your contract rate plus 2%.
How the qualifying rate is chosen
Take the larger of two numbers: your contract rate plus 2%, or the benchmark rate. For example, a contract rate of 4.5% qualifies at 6.5%, because 4.5% plus 2% is higher than the benchmark.
What the calculator assumes
The affordability calculator uses your contract rate plus 2%, or a 5.25% floor, whichever is higher. The 5.25% floor is a simplified stand-in for the benchmark. Your lender uses the benchmark published when you apply, so the result can differ from the lender’s figure.
Debt limits
Lenders also compare your housing costs with your income. The calculator uses a 39% limit for housing costs alone and a 44% limit for all debts. Lenders set their own limits, so treat these as a starting point.
What to do with the result
If the calculator shows a maximum price, ask your lender for the qualifying figure in writing before you make an offer.
Try the affordability calculator →
Official source
OSFI · Residential mortgage underwriting
This guide explains general rules. Confirm your figures with your lender, lawyer, or the official source before you act.