The Mortgage Stress Test in 2026 Explained

The Canadian mortgage stress test requires applicants to prove they can afford payments if interest rates rise, using the higher of 5.25% or their offered rate plus 2%. It applies when buying, refinancing, or switching lenders (except for straight switches or renewals). The test limits borrowing amounts to prevent excessive debt. To pass, buyers may need a larger down payment, better credit, or lower debt. Recent updates eased rules for lender switches.