What is the mortgage stress test?
For many federally regulated mortgage lenders for Ontario borrowers, the qualifying process tests whether a borrower could afford payments at a qualifying rate that is higher than the contract rate. The exact rules and exceptions depend on the mortgage and lender.
Why does it matter?
The qualifying rate can affect how much you may be able to borrow. A lender considers more than the advertised interest rate, including income, debts, down payment, property details and applicable qualification rules.
How can you prepare?
- Make a budget that includes housing costs and other monthly expenses.
- Keep records of income, savings, down-payment funds and debts.
- Review your credit report and avoid taking on new debt unnecessarily.
- Ask a mortgage professional how the current qualifying rules may apply to you.
Rules can change and not every mortgage is treated the same way. This article is general education, not a borrowing estimate or approval.
This article is for general educational purposes only. Lender requirements, policy terms and eligibility vary.