You found your dream home, the numbers seem right, but — wait — you didn’t pass the mortgage stress test? Yep, it’s a thing, and it’s a game-changer in Canada’s real estate scene.

What is the Stress Test?
Introduced in 2018, the federal stress test ensures borrowers can handle potential interest rate hikes. You’ll need to qualify for your mortgage at either 5.25% or 2% above your offered rate — whichever is higher (OSFI Guidelines).

Why It’s Important:
Even if you score a rate at 5.5%, lenders want to see if you could still make payments if rates climb to 7.5%. It’s their way of protecting you — and themselves — from potential defaults.

Pro Tip:
Boost your chances by paying down debts and improving your credit score before applying.

Expert Insight:
“The stress test isn’t there to block you — it’s designed to ensure Canadians don’t overextend themselves,” says Tiff Macklem, Governor of the Bank of Canada.