Housing reference
Mortgage Qualification Rules
Stress-test floor, qualifying-rate buffer, GDS, TDS, and lender-specific caveats for mortgage qualification calculators.
Current snapshot
Qualification anchors
Context
What this reference means
Mortgage qualification calculations compare housing and debt costs with income using a qualifying rate. The stress-test comparison uses a higher qualifying rate than the contract rate when required. Lender, insurer, product, credit, renewal, property, and underwriting rules can differ from the simplified benchmark values shown here.
Reference table
Mortgage qualification values
| Item | Rule or base | Value | Context |
|---|---|---|---|
| Minimum qualifying-rate floor | Stress-test comparison floor | 5.25% | Current OSFI minimum qualifying-rate floor and FCAC stress-test benchmark. Actual lender or insurer policy can differ. |
| Stress-test buffer | Contract rate plus buffer | 2 percentage points | The qualifying rate is commonly modelled as the greater of the floor and the contract rate plus this buffer. |
| Qualifying-rate calculation | Stress-test comparison | Greater of floor or contract rate plus buffer | CMHC, FCAC, and OSFI sources use this comparison for the stress-test rate described here. |
| GDS benchmark | Gross debt service ratio | 39% | CMHC-style benchmark for housing costs compared with gross income. Lender and insurer rules can differ. |
| TDS benchmark | Total debt service ratio | 44% | CMHC-style benchmark for housing plus other debts compared with gross income. Lender and insurer rules can differ. |
| GDS included costs | Housing-cost ratio inputs | Principal, interest, taxes, heat, and applicable condo or site costs | FCAC and CMHC describe housing costs as including mortgage payments, property taxes, heating costs, and 50% of condo fees where applicable. |
| TDS included costs | Housing plus other debts | GDS costs plus other debt obligations | Other debts can include credit cards, car loans, lines of credit, student loans, support payments, and other debt payments. |
| Uninsured mortgage straight switch | Prescribed minimum qualifying rate (MQR) treatment | a transfer between federally regulated financial institutions at renewal | OSFI no longer prescribes the MQR for an existing stand-alone uninsured mortgage transferred between federally regulated financial institutions when neither the remaining contractual amortization nor the loan amount increases, apart from up to $3,000 for transaction costs. Equity takeout is not permitted and other underwriting continues. |
| Same-year dollars | Timing convention | Same purchase year | Home price, income, debts, taxes, heating, condo fees, and mortgage assumptions should be entered for the same purchase date or scenario year. |
Straight-switch boundaries
Two related rules, kept separate
OSFI's prescribed minimum qualifying rate (MQR) treatment is limited to an existing stand-alone uninsured mortgage moving from one federally regulated financial institution to another at renewal. Neither the remaining contractual amortization nor the loan amount may increase, apart from up to $3,000 for transaction costs; equity takeout is not permitted. The new institution still applies its other underwriting and due diligence.
Finance Canada's portfolio-insurance parameters form a separate lane for qualifying low-ratio straight switches. The mortgage must have been originated at a federally regulated institution and previously assessed against the MQR, the existing amortization schedule must continue, equity takeout is not permitted, and all other mortgage-insurance eligibility criteria continue to apply.
Neither lane is a general exemption from lender approval, qualification, documentation, property review, or other underwriting requirements.
Notes and assumptions
Mortgage qualification notes are maintained with the source values for this reference.
Official sources