Qualification
B-20 Stress Test
Also known as: Stress test, Guideline B-20
Federally regulated lenders must qualify residential mortgage borrowers at the higher of two numbers: your contract rate plus two percentage points, or 5.25% (the floor). If you're offered 4.79%, you qualify at 6.79%. If you're offered 2.99%, you qualify at 5.25%. The rule is OSFI Guideline B-20.
The result: you qualify for substantially less mortgage than your contract rate alone suggests. On a $150K household income, the stress test typically costs around $140K of purchase-price ceiling.
Different lenders apply the test slightly differently, and insured (under 20% down) vs uninsured purchases follow different regulatory paths that have diverged over time. The Affordability Calculator runs the math; the deeper walk-through is at The B-20 Stress Test, Explained Without the Jargon.
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