How can you pass the mortgage stress test?

By applying for a smaller mortgage; paying down your existing debts; increasing your down payment.

Who does the mortgage stress test apply to?

Everyone applying for or refinancing a mortgage, as well as those taking out a home line of credit.

How can I calculate my mortgage affordability?

Try using the CMHC’s handy mortgage affordability calculator, found here .

Who sets the benchmark for the mortgage stress test?

Canada’s banking regulator, the Office of Superintendent of Financial Institutions (OSFI), and the federal Department of Finance.

How can I avoid the mortgage stress test?

The mortgage stress test applies to all mortgages taken out at federally regulated banks, so if you get a mortgage from an alternative lender (such as a private lender, or a provincial lender), the stress test regulations do not apply.

When was the mortgage stress test introduced?

Mortgage stress test regulations have existed in Canada for some time, but only in 2018 did they become relevant to all mortgages , regardless of size, insured status or down payment level.

What rate is used in the mortgage stress test if I have a variable rate mortgage?

The rate used in this instance is the higher of either the Bank of Canada’s qualifying rate, or your rate at time of mortgage origination plus 2%.

What happens if I fail the mortgage stress test?

You can reapply for a lower amount. Failing the mortgage stress test just means that you cannot borrow as much as you originally applied for - but you can probably borrow less. Or you can wait until you have less debt or a higher income, as the test will then have a different result.

How often is the mortgage stress test benchmark rate changed?

The rate is analyzed annually to ensure it remains appropriate to market conditions.

Amy Orr

Amy Orr started her career with several prestigious internships in investment banking and asset management. In 2007 she went on to graduate with an MSc in Finance and Investment from the University of Edinburgh Business School.

She has since spent years as both a Portfolio Analyst and as a Financial Researcher/Writer, in both the UK and Canada.

Versed in the intricacies of multiple financial markets, her forte is parsing complex technical concepts into relatable, digestible content for the masses.

Latest posts from Amy Orr

Mortgages 3 min

Amy Orr

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