Canada Mortgage Stress Test

The Government of Canada introduced the mortgage stress test for qualifying residential home purchases in 2016 to create an affordability buffer into Canadian Households budget calculations.

Stress Testing uses the greater of either the Benchmark Interest Rate set by the Bank of Canada, currently 5.25% or the lenders effective rate + a 2% premium. Once a borrower is qualified based on the stress test, the actual monthly mortgage payment will be based on the effective rate of the mortgage loan.

A link to calculating the stress test is fund here: https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx