Since 2018, all Canadian mortgage borrowers — whether putting 20% down or not — must pass the OSFI B-20 mortgage stress test. In 2026, this test can reduce your maximum purchase price by up to 18% compared to what you could technically afford at the contract rate.
What Is the Stress Test?
The stress test requires lenders to qualify you at the higher of:
- The Bank of Canada minimum qualifying rate: 5.25%
- Your actual contract rate + 2.00%
In 2026, with a typical 5-year fixed rate of 4.89%, you qualify at max(5.25%, 4.89% + 2%) = 6.89%.
GDS and TDS Ratios
Lenders use two ratios to calculate the maximum mortgage you can afford at the qualifying rate:
(Mortgage + property tax + heat + 50% condo fees)
(GDS costs + car payments + credit cards + etc.)
Impact at ,000 Household Income
| Scenario | Max Price |
|---|---|
| No stress test (at 4.89%) | ~,000 |
| With B-20 stress test (at 6.89%) | ~,000 |
| Difference | −,000 (−18%) |
How to Maximize Your Qualifying Amount
- Pay down debts — reducing car payments by /month can add ~,000 to your max purchase
- Add a co-borrower — a spouse or partner's income directly increases your GDS/TDS room
- Choose a shorter term — locking in a 2-year term with a lower rate reduces the +2% penalty
- Increase down payment — reduces mortgage size and improves ratios
Does the stress test apply when renewing a mortgage?
Not always. If you renew with the same lender at the same amortized amount, the stress test typically does not apply. However, if you switch lenders or increase your mortgage amount, the stress test will apply under OSFI's B-20 guidelines.