Canada's Mortgage Stress Test & CMHC Insurance (2026)
Before a lender approves your mortgage, they check that you could still afford it at a rate higher than the one you are offered, and if your down payment is under 20%, that you qualify for default insurance. Here is exactly how both rules work in 2026.
The stress test: the qualifying rate
Every federally regulated lender must apply OSFI's B-20 stress test. You have to prove you could carry the mortgage at the greater of your contract rate plus 2 percentage points, or 5.25% (the minimum qualifying rate). Your real payments still use your actual contract rate, the higher figure only decides how much you can borrow.
With today's typical uninsured five-year fixed rate of 4.44%, contract-plus-2% works out to 6.44%, which beats the 5.25% floor, so 6.44% is the number that matters. On a discounted rate like 3.10%, contract-plus-2% is only 5.10%, so the 5.25% floor takes over. The floor exists to stop the test from disappearing when rates are very low.
| Contract rate offered | Contract + 2% | Qualifying rate used |
|---|---|---|
| 3.10% | 5.10% | 5.25% (floor) |
| 3.45% | 5.45% | 5.45% |
| 4.04% | 6.04% | 6.04% |
| 4.44% | 6.44% | 6.44% |
Reference five-year fixed rates as of July 2026: 4.04% insured, 4.44% uninsured. The qualifying rate is the greater of contract + 2% or 5.25%.
Can you afford it? GDS and TDS ratios
The stress test is applied through two affordability ratios, both calculated at the qualifying rate:
Gross Debt Service (GDS) is your housing costs, mortgage principal and interest, property taxes, heating, and half of any condo fees, divided by your gross income. The limit is 39%.
Total Debt Service (TDS) adds all your other debt payments, car loans, credit cards, lines of credit, student loans, to the housing costs. The limit is 44%.
You need to pass both. A borrower with a modest income but a car payment and a credit-card balance often clears GDS but fails TDS, which is why paying down consumer debt before applying can raise the mortgage you qualify for more than a bigger down payment would.
Minimum down payment by price
The minimum is tiered by purchase price. You pay 5% on the first $500,000 and 10% on any portion between $500,000 and $1.5 million. At or above $1.5 million, the mortgage cannot be insured, so the minimum jumps to 20%.
| Purchase price | Minimum down payment | Effective % |
|---|---|---|
| Up to $500,000 | 5% of price | 5% |
| $600,000 | $35,000 | 5.8% |
| $800,000 | $55,000 | 6.9% |
| $1,000,000 | $75,000 | 7.5% |
| $1,500,000 and up | 20% of price | 20% |
Example: a $600,000 home needs 5% of the first $500,000 ($25,000) plus 10% of the next $100,000 ($10,000) = $35,000. The $1.5 million insured price cap took effect December 15, 2024.
CMHC insurance premiums
If you put down less than 20%, your mortgage is "high-ratio" and must carry default insurance (from CMHC, Sagen or Canada Guaranty). The premium is a percentage of the loan, set by the loan-to-value ratio (LTV), the loan as a share of the home's value. The smaller your down payment, the higher the premium.
| Loan-to-value (LTV) | Down payment | Premium (% of loan) |
|---|---|---|
| Up to 65% | 35%+ | 0.60% |
| 65.01% – 75% | 25% – 35% | 1.70% |
| 75.01% – 80% | 20% – 25% | 2.40% |
| 80.01% – 85% | 15% – 20% | 2.80% |
| 85.01% – 90% | 10% – 15% | 3.10% |
| 90.01% – 95% | 5% – 10% | 4.00% |
Choosing a 30-year amortization adds 0.20 percentage points to the premium. The premium itself can be rolled into the mortgage, but the provincial sales tax charged on it (for example 8% in Ontario, 9% in Quebec) is payable in cash at closing and cannot be financed.
The 30-year insured amortization rule
Standard insured mortgages are limited to a 25-year amortization. Since December 15, 2024, a 30-year insured amortization is permitted only when at least one borrower is a first-time buyer or the property is a newly built home. Everyone else with less than 20% down is capped at 25 years.
Put 20% or more down and your mortgage is uninsured, so there is no federal amortization cap at all, the lender decides. A longer amortization lowers the monthly payment but increases total interest, and for insured borrowers it also nudges the premium up by 0.20 points.
Use the calculators
Put these rules to work on your own numbers:
Sources
- OSFI, Guideline B-20: Residential Mortgage Underwriting Practices and Procedures (stress test, minimum qualifying rate)
- CMHC, Mortgage Loan Insurance for Consumers (premium tiers, high-ratio rules)
- FCAC, Down payment and mortgage default insurance (minimum down payment, GDS/TDS)
- Department of Finance Canada, 30-year insured amortization & $1.5M insured cap
Rules and rates verified as of July 2026.
Common questions
What rate do I have to qualify at under the mortgage stress test?
Lenders must qualify you at the greater of your contract rate plus 2 percentage points or the 5.25% minimum qualifying rate. If your offered rate is 4.44%, you qualify at 6.44% (4.44% + 2%). If your offered rate is 3.10%, the 5.25% floor applies because it is higher than 5.10%. You still pay your actual contract rate; the higher figure is only used to test whether you can afford the payment.
What is the minimum down payment in Canada in 2026?
5% on the first $500,000 of the purchase price and 10% on the portion between $500,000 and $1.5 million. At or above $1.5 million you must put down at least 20%, because those mortgages cannot be insured. A $600,000 home therefore needs $35,000 down: 5% of $500,000 ($25,000) plus 10% of the remaining $100,000 ($10,000).
How much is CMHC mortgage insurance?
The premium is a percentage of your loan that rises as your down payment shrinks. With less than 10% down (loan-to-value above 90%, up to 95%) the rate is 4.00% of the loan. With 10% to less than 15% down it is 3.10%, and with 15% to less than 20% down it is 2.80%. Choosing a 30-year amortization adds 0.20 percentage points. The premium can be added to the loan, but the provincial sales tax on it is due in cash at closing.
Who can get a 30-year insured mortgage?
As of December 15, 2024, insured mortgages (less than 20% down) can be amortized over 30 years only if at least one borrower is a first-time buyer or the home is newly built. Everyone else with an insured mortgage is capped at 25 years. If you put 20% or more down, your mortgage is uninsured and there is no federal amortization limit; the lender sets it.