Mortgage Stress Test
Minimum Qualifying Rate (MQR)
A federal rule that makes you qualify for a mortgage at a higher rate than your contract rate, to show you could handle higher payments.
The mortgage stress test checks whether you could still afford your mortgage if interest rates rose. Instead of qualifying you at the rate in your contract, a federally regulated lender such as a bank qualifies you at a higher rate. For uninsured mortgages, the Office of the Superintendent of Financial Institutions (OSFI) calls this the minimum qualifying rate.
Uninsured mortgages usually have a down payment of 20% or more. For them, the qualifying rate is the greater of 5.25% or your contract rate plus 2%. OSFI sets this rule under its Guideline B-20 and reviews it at least once a year. The Department of Finance sets the qualifying rule for insured mortgages. The Financial Consumer Agency of Canada says banks must use the same greater-of test for both insured and uninsured mortgages.
The lender uses the qualifying rate to work out your debt service ratios. Federal consumer guidance suggests housing costs should not exceed 39% of gross household income, and total debt should not exceed 44%. Because the qualifying payment is higher than your real payment, the stress test is often why a pre-approval comes in lower than expected. Lenders that are not federally regulated, such as many credit unions, do not have to apply it. They may still ask you to pass one.
Existing homeowners also face the test when they refinance or take out a home equity line of credit. There are two exceptions at renewal. OSFI does not expect lenders to apply the qualifying rate to an uninsured straight switch to another federally regulated lender. The loan amount and amortization must not increase. The federal government also lets insured mortgage holders switch lenders at renewal without another stress test.
OSFI's current guidance keeps the floor at 5.25% and the buffer at 2%. Since 2025, OSFI has also limited how much of each lender's new uninsured lending can exceed 4.5 times borrower income. That limit applies to lender portfolios, not to individual borrowers.
Sources
- OSFI: Minimum qualifying rate for uninsured mortgages
- FCAC: Preparing to get a mortgage
- Department of Finance: Boldest mortgage reforms in decades (Sept 2024)
- OSFI: Loan-to-income limit
Last reviewed October 16, 2026.
Go deeper
Related terms in Mortgage & Buying
- Trigger Rate The interest rate at which a fixed payment on a variable-rate mortgage covers only interest, so nothing goes toward the principal.
- Amortization The total time it would take to pay off your mortgage at your current rate and payment, usually much longer than your rate term.
- Closing Costs The one-time fees beyond your down payment needed to complete a home purchase, often 1.5% to 4% of the price.
- CMHC Mortgage Default Insurance Insurance that protects your lender if you stop paying, and is usually required when your down payment is less than 20% of the price.
General information only, not legal, tax, or financial advice. Rules change and vary by province; confirm the current details with the relevant authority before you rely on them.