Mortgage Stress Test in Canada Explained

What's tested

Your payment at the qualifying rate goes into two ratios. Gross debt service (GDS): payment, property tax, heating and 50% of condo fees, at most 39% of gross income. Total debt service (TDS): GDS plus other debts, at most 44%.

Why it exists

The test checks that you could still afford payments if rates were higher at renewal. It applies to insured and uninsured mortgages from federally regulated lenders.

Worked example

If a lender offers you 4.50%, you must qualify at the higher of 6.50% (4.50% plus 2 percentage points) or 5.25%. Your payment at that qualifying rate, not the contract rate, goes into your GDS and TDS ratios.

Today's borrowing costs

On new uninsured mortgages, Canadians paid an average of 4.58% (Aug 2026) for fixed terms of five years or more and 3.90% (Aug 2026) for variable rates, according to the Bank of Canada. Insured borrowers paid 4.12% and 3.74%.

The Bank of Canada's policy rate is 2.50% (Nov 11, 2026) and the banks' prime rate is 4.70% (Nov 11, 2026). Variable rates move with prime; fixed rates follow Government of Canada bond yields, with the 5-year yield at 3.46% (Nov 10, 2026).