What is the qualifying rate?

The greater of your contract rate + 2% or the Minimum Qualifying Rate (currently 5.25%). For example, on a 5.25% mortgage, you must qualify at 7.25% (contract + 2%, since that beats the 5.25% floor).

Gross Debt Service ratio = housing costs (mortgage + tax + heat + 50% condo fees) ÷ gross income. Total Debt Service ratio adds other monthly debts (loans, credit cards). Limits: 39% GDS / 44% TDS at most lenders.

What if I fail the stress test?

Three options: more down payment (lowers the mortgage and the GDS/TDS), a less expensive home, or applying with a co-borrower whose income improves the ratios. Some non-federally-regulated lenders (credit unions, alt lenders) have looser rules but charge higher rates.

Does the stress test apply to renewals?

If you renew with the same lender, no. If you switch lenders at renewal, yes — even though you're not borrowing more money. This rule was relaxed in late 2024 for straight switches at renewal, but check current OSFI guidance.

Is the stress test the same for everyone?

The math is the same. The 39% / 44% limits are stretched at lender discretion for very strong borrowers (high income, large reserves, perfect credit). Insured borrowers have stricter cap pricing — the brokers have the spreadsheet for the edge cases.

Why does the bank's stress-test number differ from this one?

Banks include life/disability insurance premiums, payment-frequency adjustments, and may use a slightly different qualifying rate if your contract rate is variable. This calculator gives you the OSFI baseline.

Stress test · OSFI B-20

Will you pass the stress test?

OSFI requires every federally regulated lender to qualify you at the higher of your contract rate + 2% or the 5.25% Minimum Qualifying Rate. This calculator computes the qualifying payment and your GDS/TDS ratios so you know if you pass before your broker tells you.

Assumptions

Home price

Down payment

Contract rate

Amortization (years)Gross household income (annual)

Property tax (annual)

Heating (annual)

Condo / HOA (monthly)

Half is added to GDS/TDS per OSFI convention.Other monthly debt

Loans, credit-card minimums, lines of credit — total monthly required payments.

Results

At the qualifying rate

$3,150/mo

Stress test

PASS

Qualifying rate7.3%

At your contract rate$2,622/mo

GDS ratio (39.0%)36.1%

TDS ratio (44.0%)36.1%

Foncier the whole deal

This number is one of seventy.

Cap rate is a start. The full Foncier analyzer adds DSCR, IRR, ten-year cashflow projections, scenarios, side-by-side compare, and live community rent comps — for free, on your first three deals.

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How this is calculated

Qualifying rate = max(contract rate + 2%, 5.25%). Qualifying payment is computed at that rate over your amortization. GDS = (qualifying P&I + tax + heat + 50% condo fees) ÷ income. TDS = GDS + other debts ÷ income. OSFI limits: 39% GDS, 44% TDS for most borrowers.

Worked examples

Stress-test pass and fail scenarios.

$120k income · $550k home · passes

GDS 32% · TDS 38%

$120,000 household income, $550,000 home with 20% down. Contract rate 5.25% → qualifying rate 7.25%. Stressed payment: $3,178/mo. With $4,000 in property tax and $1,500 in heating, GDS lands at 32% and TDS at 38% — both well under the limits.

Qual. rate7.25%

Qual. pmt$3,178/mo

GDS32%

VerdictPass

$80k income · $550k home · fails

GDS 49% · TDS 55%

Same home, lower income. The stressed payment is identical, but $80,000 is too thin: GDS hits 49% (limit 39%) and TDS 55% (limit 44%). The lender will either say no or require more down payment / a less expensive home.

Qual. rate7.25%

Qual. pmt$3,178/mo

GDS49%

VerdictFail

Stress test questions

About the OSFI B-20 stress test.

An OSFI rule (Guideline B-20) that requires federally regulated lenders to qualify you at a higher rate than your contract rate, to make sure you can still afford the mortgage if rates rise. It applies to insured and conventional purchases, and to refinances.

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