Update on the Stress Test

Effective July 22nd, the Bank of Canada recently reduced the benchmark qualifying rate to 5.19 per cent, down from 5.34 per cent.

The mortgage stress test, implemented in early 2018 by the Office of the Superintendent of Financial Institutions, means that borrowers with a down payment of more than 20 per cent, who don’t require mortgage insurance, have to show they can afford a mortgage with an interest rate that’s two percentage points above the rate being offered, or the Bank of Canada’s 5-year benchmark, whichever is higher.

The new rules only apply to new mortgage loan agreements. They do not apply when renewing your existing mortgage loan.