The Mortgage Stress Test

What is it?

The mortgage stress test was established by The Government of Canada and the rate is set by the bank of Canada. This rate is also known as the benchmark rate, the qualifying rate or the posted rate.

The mortgage stress test can sound intimidating but its true purpose is intended to protect the Canadian economy and to minimize any negative effect on the homeowners affordability.

All mortgages are qualified differently, if you have any questions feel free to reach out!

How does the Mortgage Stress Test Work?

The stress test is an exaggerated interest rate used to ensure the homeowners affordability at the time of renewal.

Should I be worried about my mortgage stress test?

The amount of debt one carries can negatively affect the ability to purchase a home and make mortgage payments.

The average Canadian household carries more debt than disposable income as a result a rise in interest rates could negatively affect the homeowners affordability.

What is the current stress test rate?

It is currently at 5.25% or the contract rate plus 2%. Whichever is higher.

The contract rate is the rate offered by the lender at time of signing.

The stress test is used to qualify consumers for multiple mortgage products.

What did summer say to spring?

“I’m going to fall!”

Happy April Fools

If you have any questions, do not hesitate to contact me!

Lucas Burns

613-298-1522

lburns@martelmortgages.ca