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The minimum qualifying rate — commonly called the mortgage stress test — is the rate Canadian lenders must use to calculate a borrower’s GDS and TDS ratios. It is the greater of the borrower’s contract rate plus 2 percentage points, or 5.25%.
The stress test exists so a borrower who qualifies today can still afford their payments if rates rise before their next renewal. Instead of testing GDS and TDS at the contract rate, OSFI Guideline B-20 requires lenders to use whichever is higher: the contract rate plus 2 percentage points, or a fixed floor of 5.25%.
Both insured and uninsured mortgages are stress-tested at origination. One exception: 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 amount, same amortization, moving to a new lender.
MQR = greater of ( Contract rate + 2 percentage points ) or 5.25%
Set by OSFI: Guideline B-20 requires the minimum qualifying rate for both insured and uninsured mortgages at origination.
The floor is fixed: 5.25% is the minimum rate used even when a borrower’s contract rate + 2% would be lower.
Renewal exception since Nov 21, 2024: a straight switch of an uninsured mortgage — same amount, same amortization, new lender — no longer requires re-qualifying at the MQR.
Affects every application: mortgage agents (Ontario, FSRA), submortgage brokers (BC, BCFSA), mortgage associates (Alberta, RECA), and courtiers hypothécaires (Quebec, AMF) all calculate GDS/TDS at the MQR, not the contract rate, before submitting a file.
A lender offers a borrower a contract rate of 4.49%:
6.49% is higher than the 5.25% floor, so GDS and TDS are both calculated using 6.49% — not the 4.49% rate the borrower will actually pay.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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