Mortgage Stress Test Calculator

What is the mortgage stress test?

Federally-regulated Canadian lenders must qualify you at a higher rate than the one they are offering, so that a future rate hike does not push you into default. The qualifying rate is the higher of your contract rate plus 2%, or the benchmark rate of 5.3% (set by OSFI and unchanged since June 2021). The rule applies to new purchases and refinances. As of November 21, 2024, borrowers switching lenders at renewal no longer need to re-pass the test, provided the loan amount and amortization stay the same.

GDS in plain English

Gross Debt Service is the share of your gross monthly income that goes to housing. It adds up mortgage principal and interest (at the qualifying rate), property tax, heating, and 50% of condo fees. Under CMHC rules, GDS must be 39.0% or less. If you make $10,000 gross per month, no more than $3,900 can go to housing.

TDS in plain English

Total Debt Service is GDS plus every other debt payment: car loans, credit card minimums, lines of credit, student loans, personal loans. CMHC caps TDS at 44.0%. A fat car payment or big credit card balance can push you over the line even if the mortgage itself looks fine. That is why the calculator splits debts into three categories: all three combine into the same TDS total, but seeing them separately makes it easier to spot where the problem lives.

CMHC insurance premium

When your down payment is under 20%, default insurance is mandatory and paid by you (the borrower). The premium is a percentage of the loan amount based on your loan-to-value ratio:

• 80.01% to 85% LTV: 2.80%
• 85.01% to 90% LTV: 3.10%
• 90.01% to 95% LTV: 4.00%
• Amortizations over 25 years: +0.20% surcharge

The premium is typically rolled into the mortgage, so your monthly payment is calculated on the total (base + premium). As of December 15, 2024, CMHC-insured mortgages are available on homes up to $1.5 million, and 30-year insured amortizations are available, but only to first-time buyers or buyers of newly-constructed homes. Everyone else remains capped at 25 years for insured mortgages.

Borrowers with 20% or more down can still choose conventional (portfolio) insurance at lower rates:

• 75.01% to 80% LTV (20-24.99% down): 2.40%
• 65.01% to 75% LTV (25-34.99% down): 1.70%
• 65% LTV or less (35%+ down): 0.60%

This is common for rental properties and some refinances. The calculator shows the optional premium for reference but does not add it to your mortgage payment.

Why it matters

Passing the stress test is not just a hoop to jump through. It is a sanity check on whether you can still pay the mortgage if rates rise by 2% at renewal. If you fail, either reduce the mortgage amount, pay down other debts, extend amortization, or wait until your income grows.

Things this calculator does not model

• Land transfer tax, legal fees, home inspection, and other closing costs.
• Individual lender overlays. OSFI B-20 binds federally-regulated lenders (banks and a handful of federal credit unions). Most credit unions in Canada are provincially regulated and may set their own qualifying rules, though most voluntarily apply similar standards. Private lenders are generally not bound at all.
• Variable-rate specifics (trigger rate mechanics). The qualifying rate test is the same, but payment behaviour differs.
• Provincial sales tax on the CMHC premium (Ontario, Quebec, Saskatchewan, and Manitoba charge PST on the premium at closing).

Educational only. Talk to a mortgage broker or your lender for a firm qualification.