OSFI Stress Test 2026: How the Qualifying Rate Affects Your Buying Power

The OSFI mortgage stress test requires borrowers to qualify at a rate higher than their contract rate — protecting against future rate increases.

How the Stress Test Works

You must qualify at the greater of:

• Your contract rate + 2%
• 5.25% (the OSFI floor rate)

Example: With a 4.5% contract rate, you qualify at 6.5% (4.5% + 2%).

Impact on Buying Power

Contract Rate	Qualifying Rate	Max Purchase (GDS 39%)
4.0%	6.0%	$620,000
4.5%	6.5%	$580,000
5.0%	7.0%	$545,000

Assumes $100K income, 20% down, 25-year amortization.

GDS and TDS Ratios Explained

• GDS (Gross Debt Service): Housing costs ÷ gross income. Must be ≤ 39%.
• TDS (Total Debt Service): All debt payments ÷ gross income. Must be ≤ 44%.

Strategies to Improve Qualification

1. Larger down payment — reduces loan amount, lowers GDS/TDS.
2. Pay off debts — credit cards, car loans directly improve TDS.
3. Longer amortization — 30 years lowers monthly payment (but increases total interest).
4. Increase income — bonus, overtime, or second income source.

Use our Mortgage Calculator to test different scenarios and see your qualifying numbers.