What is the OSFI B-20 stress test?

Office of the Superintendent of Financial Institutions (OSFI) Guideline B-20 requires federally regulated lenders to qualify all uninsured residential mortgages at the greater of the contract rate plus 2 percentage points, or the Bank of Canada minimum qualifying rate (currently 5.25%). The borrower must demonstrate they can afford payments at this higher rate even if they only pay the contract rate.

Does the stress test apply to insured mortgages?

Yes — CMHC-insured mortgages (under 20% down payment) use the same qualifying-rate rule via mortgage default insurance underwriting. Both insured and uninsured borrowers must pass.

What are GDS and TDS ratios?

Gross Debt Service (GDS) = (mortgage payment + property tax + heat + 50% of condo fees) ÷ gross monthly income. Most lenders cap at 39% (CMHC max 39%). Total Debt Service (TDS) adds other debt payments (car loans, lines of credit, credit cards). TDS is typically capped at 44% (CMHC max 44%).

The Bank of Canada floor (5.25% since June 2021) prevents the qualifying rate from collapsing in a low-interest-rate environment. When contract rates exceed 3.25%, the +2% rule dominates; when contract rates are below 3.25%, the 5.25% floor kicks in.

Does this apply at credit unions or private lenders?

OSFI B-20 only binds federally regulated lenders (banks, federally chartered trust companies). Provincially regulated credit unions and private lenders are not bound by it and may use their own qualifying rules — often easier to qualify with, but at higher interest rates.

Canadian Mortgage Stress Test

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Free Canadian mortgage stress test calculator (OSFI B-20). Federally regulated lenders must qualify uninsured mortgages at the greater of (a) the contract rate + 2% or (b) the Bank of Canada minimum qualifying rate (currently 5.25%). This tool computes your stress-test payment, your gross debt service (GDS) ratio, and the maximum mortgage you'd qualify for at typical 39% GDS / 44% TDS thresholds.

Mortgage amount

Contract rate (%)

Amortization (years)

Gross annual income

Prop. tax / mo

Heat / mo

Condo / mo

Other monthly debt payments

Car loans, lines of credit, minimum credit-card payments.

OSFI B-20 · Qualifying rate = greater of (contract + 2%) or 5.25%

GDS ≤ 39% · TDS ≤ 44% · CMHC-insured limits

Stress-test payment / month

$3,376

@ 6.50% qualifying rate

Does not pass

GDS

47.1%

limit 39%

TDS

51.9%

limit 44%

Contract payment$2,779

Max mortgage @ GDS$399,877

Disclaimer: For informational purposes only. This is not financial, tax, or legal advice — consult a licensed professional before making decisions.

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