Qualifying rate
The engine uses the greater of the contract rate plus the entered buffer or the entered qualifying-rate floor. Policy values remain editable because the regulator can change them and lender treatment may differ.
Canadian mortgage qualification
Mortgage Stress Test Calculator Canada
Compare the contractual mortgage payment with the higher qualifying payment, estimate the gross income required under GDS and TDS limits, and test additional rate shocks.
Current qualifying-rate frameworkContract vs stress-test paymentGDS and TDS income estimateRate-shock scenarios
Calculation inputs
Test the mortgage at the qualifying rate
Enter the proposed mortgage and carrying costs. The engine compares the contract payment with the regulatory qualifying payment and estimates income required under the entered GDS and TDS limits.
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The engine includes 50% in housing costs.
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Qualification policy settings
How the calculation works
Understand the formula before relying on the result
Canadian payment formula
Both contract and qualifying payments use a nominal annual rate compounded semi-annually and converted to an equivalent monthly rate before applying the level-payment annuity formula.
Housing-cost calculation
The qualifying payment is combined with monthly property tax, heat, and 50% of entered condominium fees to estimate the housing cost used in GDS.
Income requirement
The engine solves separately for income under the entered GDS and TDS limits. TDS adds monthly debt obligations. The higher annual income estimate is shown as the simplified qualifying requirement.
Interpret the result
Payment gap
The difference between contract and qualifying payments shows how much payment capacity the application must demonstrate even though the actual payment may be lower.
Binding ratio
When other debts are material, TDS often produces the higher income requirement. With little debt but high property carrying costs, GDS may govern.
Rate sensitivity
The additional scenarios are not forecasts. They show how the same mortgage amount reacts to higher rates and can support renewal and budget planning.
Approval is broader than the ratio
A ratio that fits does not confirm approval. Income quality, credit, property, down payment, documents, and lender-specific policy remain essential.
Common mistakes
- Using the contract payment instead of the qualifying payment in debt-service ratios.
- Treating all income as fully acceptable before reviewing documentation and lender policy.
- Ignoring condominium fees, property taxes, heating, or monthly debt obligations.
- Assuming 39% GDS and 44% TDS are universal approval limits.
- Confusing a stress-test qualification result with an actual mortgage commitment.
What lenders review
- Source, stability, history, and documentation of qualifying income.
- How revolving, instalment, support, secured-line, and contingent debts are counted.
- Property taxes, heat, condominium fees, and property type.
- Credit history, utilization, payment conduct, and recent inquiries.
- Whether the transaction is insured, insurable, or uninsured and which qualifying rules apply.
Planning tips
- Run the calculation before making an offer and again when the rate changes.
- Test both current debts and a documented debt-repayment scenario.
- Keep a cash-flow buffer beyond the regulatory qualification threshold.
- Use a specific property-tax bill when testing a known property.
- Ask for a document-level review when income is variable, self-employed, commissioned, rental, pension, or support-based.
Connected HopeWell knowledge
Connect the mortgage stress test calculator to the mortgage decision
Use the result alongside HopeWell's guide chapters, glossary definitions, real underwriting case studies, service pages, and related calculators.
Calculation pathway
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Frequently asked questions
Questions about this calculation
What is the current Canadian mortgage stress-test rate?
For uninsured mortgages under the current OSFI framework, the minimum qualifying rate is the greater of the contract rate plus 2 percentage points or 5.25%. Insured mortgage qualification uses the applicable federal insurer framework. The calculator keeps the floor and buffer editable.
Is the stress-test payment my actual payment?
No. It is a higher qualification payment used to test repayment capacity. Your contractual payment is based on the mortgage rate and terms in the commitment.
Why does the calculator estimate required income?
It divides qualifying housing costs by the entered GDS limit and total housing-plus-debt costs by the entered TDS limit, then shows the higher amount.
Can a lender approve ratios above the defaults?
Some lender or insurer programs may permit different ratios depending on credit, property, file strength, and policy. The default limits are planning assumptions, not universal entitlements.
Does passing the stress test guarantee approval?
No. The lender must still verify income, credit, down payment, property, documentation, legal compliance, and program eligibility.