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Guideline B-20 is OSFI’s Residential Mortgage Underwriting Practices and Procedures guideline for federally regulated lenders. It’s best known for the minimum qualifying rate — the stress test — that sets the rate a borrower must qualify at, not the rate they actually pay.
B-20 lays out how federally regulated banks and trust companies should assess a borrower’s ability to repay, verify income and down payment sources, value the property, and manage loan-to-value limits. Its most visible rule is the minimum qualifying rate: borrowers must qualify at the greater of their contract rate plus 2 percentage points or 5.25%, even on an uninsured mortgage.
B-20 has been amended over time in response to housing-market risk. Since November 21, 2024, OSFI no longer requires re-qualification at the minimum qualifying rate for a straight switch of an uninsured mortgage at renewal — same loan amount, same amortization, moving to a new lender — which removed a friction point that had been discouraging renewal shopping.
The stress test: borrowers must qualify at the greater of contract rate + 2 percentage points or 5.25%, under OSFI’s authority.
Straight-switch exemption: since November 21, 2024, a same-amount, same-amortization switch of an uninsured mortgage to a new lender at renewal no longer requires MQR re-qualification.
Applies to federally regulated lenders: B-20 binds the banks and federally chartered lenders OSFI supervises; provincially regulated lenders and private lenders aren’t directly bound, though many align with it.
Insured mortgages too: the same minimum qualifying rate applies to insured purchases, layered on top of the insurer’s own GDS/TDS limits.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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