Mortgage Stress Test Calculator
This calculator shows the rate a federally regulated lender must qualify you at under the mortgage stress test, and what that higher qualifying rate does to the loan size your income can carry. Enter your income, existing debts, contract rate, amortisation and a debt-service ceiling to see the gap between the rate you are quoted and the rate you are tested at.
Qualifying rate 7.25%
OSFI's Guideline B-20 requires federally regulated lenders to qualify an uninsured mortgage at the greater of the contract rate plus two percentage points and 5.25%. Insured mortgages have their own rules and some lenders and provinces are not subject to B-20 at all. This is arithmetic, not an approval.
What this calculator takes in, and what it hands back
Five inputs drive the result: your gross annual income, your existing monthly debt payments, the contract rate on the mortgage you are considering, the amortisation in years, and a debt-service ceiling you choose. Gross income means before tax and before deductions. Existing monthly debt payments means the amounts already reported against you each month, such as car loans, credit card minimums, student loan payments and other mortgages. The calculator converts your income to a monthly figure, applies the ceiling you entered to find how much monthly payment room exists, subtracts the debts you listed, and then converts what remains into a loan amount using the stress-test qualifying rate rather than your contract rate.
Two outputs matter. The first is the qualifying rate itself: the rate a federally regulated lender must use to test your file, which is higher than the rate you were quoted. The second is the loan size that qualifying rate supports once your existing debts are counted. The distance between that figure and the loan size your contract rate alone would support is the practical cost of the stress test.
Where the qualifying rate comes from
Under OSFI Guideline B-20, federally regulated mortgage lenders generally qualify an uninsured mortgage at the greater of the contract rate plus 2 percentage points and 5.25% (OSFI Guideline B-20). The word greater is doing real work here: if your contract rate plus 2 points lands below the floor, the floor applies, and if it lands above, the higher number applies. Two limits on that rule are worth stating plainly. Insured mortgages and provincially regulated lenders are not all subject to B-20, and lending in Canada is licensed provincially, so the regulator and the rules differ by province and territory (FCAC lists the provincial and territorial regulators).
How the borrowing room is calculated
The arithmetic, in words, runs in one direction and then back again. Take gross annual income and divide by twelve. Multiply by the debt-service ceiling you entered, since federally regulated mortgage lenders generally work to a total debt service ratio ceiling of about 44%, to get the total monthly payment room. Subtract the existing monthly debt payments you listed. What remains is the largest housing payment the numbers allow, and that payment normally has to absorb principal, interest and typically property tax and heating costs. Then invert the payment calculation: using the qualifying rate and the amortisation you chose, work out what loan amount produces a payment that size. One quirk of the arithmetic is that Canadian fixed-rate mortgages are compounded semi-annually by law, so the monthly rate is not simply the annual rate divided by twelve. FCAC's mortgage material explains how lenders assess affordability more broadly.
What the result assumes
- That the income and debts you typed are complete and current, and that every obligation you carry is captured by the monthly figure you entered.
- That the debt-service ceiling you chose is the one a lender would apply, including any property tax and heating costs counted inside the housing payment.
- That the amortisation you chose is one the lender will accept for the mortgage type you are considering.
- That no mortgage default insurance premium, closing cost or fee is added to the balance or paid from elsewhere.
- That your credit history, the property itself and each lender's own underwriting overlays are outside the calculation.
The result is arithmetic on your inputs, not a decision. loanmoose.ca is not a lender and does not make credit decisions; it cannot approve you, set a rate, or say what a lender will do with your file. A lender decides what it will lend, at what rate and on what conditions, after reviewing things this page cannot see.
Frequently asked questions
What qualifying rate does the mortgage stress test use?
At federally regulated lenders, the qualifying rate for an uninsured mortgage is generally the greater of your contract rate plus 2 percentage points and 5.25%, under OSFI Guideline B-20. Insured mortgages and provincially regulated lenders are not all subject to that guideline, so the figure that applies to you depends on the lender, the province or territory, and whether the mortgage is insured.
Does a higher qualifying rate change how much I can borrow?
Yes, mechanically. The qualifying rate is used to build the payment that gets measured against your income, so a higher rate produces a larger payment for the same loan amount and therefore supports a smaller loan inside the same room. How much smaller depends on your income, your existing debts and the rate itself.
Is the calculator result an approval or an offer?
No. loanmoose.ca is not a lender and does not make credit decisions. The output is arithmetic on the numbers you enter, and it does not know your credit history, the property, a lender's underwriting overlays, insurance premiums or the fees on a file. Only a lender can decide what it will lend, at what rate and on what conditions.
Why does the amortisation I enter matter to the result?
Amortisation sets how many payments the loan is spread across. Stretching the schedule lowers each payment, which leaves more room under the same debt-service ceiling and so supports a larger calculated loan. The trade-off is duration: the same longer schedule means more payments and more interest paid over the life of the loan.
What debt-service ceiling should I enter?
A figure near 44% is the total debt service ratio ceiling that federally regulated mortgage lenders generally work to, which makes it a reasonable starting point for testing. It does not bind every lender or every program, and insured files can be assessed differently. Entering a lower or higher number shows how sensitive your result is to that assumption.
Where can I check which mortgage rules apply in my province?
Start with the Financial Consumer Agency of Canada, which publishes material on mortgages, debt and the regulators that license lending in each province and territory. OSFI's guideline covers federally regulated lenders and uninsured mortgages, while most other lenders answer to provincial regulators. Because the regulator differs, the qualifying rules you actually face depend on where you borrow and from whom.
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