Home · Learning centre · Approvals
Approvals
The stress test, in plain language
You do not qualify at your rate. You qualify at a higher one. Here is the arithmetic.
Rateshop Team · Jul 29, 2026 · 4 min read
Every federally regulated lender must approve you at the greater of your contract rate plus two percent, or 5.25%. That is the stress test.
What it costs you in buying power
On a household income of $120,000 with no other debt, the difference between qualifying at 4% and qualifying at 6% is roughly $110,000 of purchase price.
Ways to widen the gap
Clear a car loan before you apply — a $600 payment costs you around $95,000 of mortgage. Extend the amortization to 30 years where you are eligible. Add a co-signer with clean debt ratios. Or look at credit unions, which are provincially regulated and set their own qualifying rules.