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How the mortgage stress test is impacting qualification amounts

Ross Taylor
Publication date:
June 20, 2022
Article Summary: 

The mortgage stress test in Canada has created a discrepancy in the size of mortgage loans borrowers can qualify for, as the stress test rate for a 5-year fixed mortgage is 2% higher than that for a variable mortgage. As a result, many borrowers are choosing a variable-rate mortgage to maximize the amount of the mortgage they can qualify for, even if their actual preference is for a fixed-rate mortgage. To get ahead of the mortgage stress test, borrowers can choose a shorter fixed-term mortgage or a private mortgage lender. Credit unions also offer mortgage products that qualify the borrower at the actual contract rate or the contract rate plus 1%. Borrowers are advised to select a mortgage type that best suits their needs and budget.


mortgage, stress test, fixed-rate, variable-rate, borrower, Bank of Canada, credit union.

Source Citation: 
Ross Taylor
How the mortgage stress test is impacting qualification amounts
June 20, 2022
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