How Does the Stress Test Affect My Mortgage Approval?

The stress test ensures buyers can afford their mortgage if rates rise. It affects qualification significantly.

How It Works

You must qualify at the higher of:

• The Bank of Canada benchmark rate

• Your contract rate + 2%

Impact on Buying Power

Most buyers qualify for less than they expect. This influences property type and neighbourhood choices.

How to Increase Qualification

• Larger down payment

• Joint application

• Paying down other debts

• Longer amortisation

The Bottom Line

The stress test reduces risk for lenders and forces buyers to plan more conservatively.