The stress test on a refinance or HELOC
When you refinance or open a HELOC with a federally regulated lender, you must qualify at the greater of your contract rate plus 2 points or 5.25% (OSFI's minimum qualifying rate). At today's 4.58% average new 5-year rate, that's 6.58%. Housing costs must fit within about 39% of gross income and all debts within 44%.
The rule
OSFI: "The greater of the mortgage contract rate plus 2% or 5.25%", reviewed at least annually (page last modified January 29, 2026). Lenders then apply debt-service ratios; CMHC's insured limits of GDS 39% and TDS 44% are the common yardstick.
How much income supports
| Gross income | No other debts | $800/mo other debts |
|---|---|---|
| $80,000 | $311,258 | $242,090 |
| $120,000 | $503,942 | $459,477 |
| $160,000 | $696,626 | $676,864 |
| $220,000 | $985,652 | $985,652 |
HELOCs
The HELOC payment is tested at the qualifying rate too. Practice varies on how; our calculators assume the amount drawn over 25 years.
When it doesn't apply
Uninsured straight switches at renewal (same amount and amortization) are exempt since November 2024. Provincially regulated lenders (many credit unions) set their own rules.
Frequently asked questions
Does the stress test apply to a HELOC?
Yes. OSFI's minimum qualifying rate applies to uninsured residential lending by federally regulated lenders, including HELOCs. Lenders test the HELOC payment at the qualifying rate.
Primary sources
- OSFI — Minimum qualifying rate for uninsured mortgages (effective January 29, 2026). Checked .
- OSFI — Guideline B-20: Residential mortgage underwriting (HELOC 65%, appraisals, AVMs) (effective October 31, 2017). Checked .
- CMHC — Calculating GDS / TDS. Checked .
- OSFI — Straight switches exempt from the prescribed MQR; portfolio LTI limits (effective November 21, 2024). Checked .