The federal mortgage stress test makes sure borrowers could still afford their payments if rates rise.
The rule
You must qualify at the greater of 5.25% or your contract rate + 2%. If you’re offered 4.29%, the lender checks that you could afford payments at 6.29%.
What lenders measure
- GDS (max 39%): housing costs (stress-tested payment, property tax, heat, 50% of condo fees) ÷ gross income
- TDS (max 44%): GDS costs + all other debt payments ÷ gross income
Renewals and switches
Since November 2024, borrowers with uninsured mortgages who switch lenders at renewal (without increasing the amount or amortization) no longer need to re-qualify under the stress test.
Try our Mortgage Approval Calculator to see how the stress test affects your budget.