Qualifying under OSFI's stress test: your contract rate plus 2 points, or 5.25%
A borrower offered 3.0% and another offered 3.25% are tested at exactly the same rate. Both have to show they could carry their mortgage at 5.25%, even though one is paying a quarter point less.
That comes from how the federal stress test is built. As of January 2026, OSFI requires lenders to qualify you at your contract rate plus 2 percentage points, or 5.25%, whichever is higher. You'll also see it written as "plus 200 basis points." That's the same number: 100 basis points make one percentage point. The rule hasn't moved. What matters for your affordability is which half of it applies to you.
The floor takes over below 3.25%
Add 2 points to a contract rate of 3.25% and you land on 5.25%, right at the floor. Anything above that, and the contract rate decides your test. Anything below, and the floor decides it.
Here's an illustrative example. A contract rate of 3.99% is tested at 5.99%. Drop it to 3.74% and the test falls to 5.74%, so the lender's math lets you carry a bit more. Now compare 3.0% and 2.75%. Both are tested at 5.25%, and the cheaper rate doesn't raise your approval at all.
What to do with that
When you compare offers, check where each rate sits relative to 3.25%. Above it, a lower rate helps twice: a smaller payment and more qualifying room. Below it, a lower rate still saves you real interest, but it won't raise your maximum purchase price, so if approval is your limit, the answer lies in your down payment, your debts or your amortization.
The same test applies to HELOCs and to refinances, so it shapes debt consolidation in Duncan just as much as a first purchase. Before you set a price range, work out your qualifying rate first and find out which side of 3.25% you're on.
A borrower offered 3.0% and another offered 3.25% are tested at exactly the same rate. Both have to show they could carry their mortgage at 5.25%, even though one is paying a quarter point less.
That comes from how the federal stress test is built. As of January 2026, OSFI requires lenders to qualify you at your contract rate plus 2 percentage points, or 5.25%, whichever is higher. You'll also see it written as "plus 200 basis points." That's the same number: 100 basis points make one percentage point. The rule hasn't moved. What matters for your affordability is which half of it applies to you.
The floor takes over below 3.25%
Add 2 points to a contract rate of 3.25% and you land on 5.25%, right at the floor. Anything above that, and the contract rate decides your test. Anything below, and the floor decides it.
Here's an illustrative example. A contract rate of 3.99% is tested at 5.99%. Drop it to 3.74% and the test falls to 5.74%, so the lender's math lets you carry a bit more. Now compare 3.0% and 2.75%. Both are tested at 5.25%, and the cheaper rate doesn't raise your approval at all.
What to do with that
When you compare offers, check where each rate sits relative to 3.25%. Above it, a lower rate helps twice: a smaller payment and more qualifying room. Below it, a lower rate still saves you real interest, but it won't raise your maximum purchase price, so if approval is your limit, the answer lies in your down payment, your debts or your amortization.
The same test applies to HELOCs and to refinances, so it shapes debt consolidation in Duncan just as much as a first purchase. Before you set a price range, work out your qualifying rate first and find out which side of 3.25% you're on.
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