OSFI Stress Test

Under OSFI Guideline B-20, every borrower at a federally regulated A Lender must qualify at the higher of (a) their contract rate plus 2% or (b) the OSFI minimum qualifying rate (MQR, currently 5.25%). The 5.25% floor was set effective June 1, 2021, replacing the prior "Bank of Canada 5-year posted rate" benchmark. This means even if your actual mortgage rate is 4.5%, you must show you can afford the payments at 6.5%. A parallel rule under the federal insured-mortgage qualifying-rate regulation (Department of Finance Canada) applies to insured (high-ratio, < 20% down) mortgages. The formulas currently match the OSFI rule for uninsured mortgages, but the legal authority differs. The stress test was introduced in 2018 to cool overheated markets and ensure borrowers can withstand rate hikes at renewal. Provincially regulated credit unions and B Lenders historically didn't apply it, although some now do voluntarily. Private lenders never apply it. The stress test is the single biggest reason mortgage agents work with multiple lenders — being declined by an A Lender's stress test doesn't mean you're not a creditworthy borrower; it means you may need a B Lender solution.