Canadian mortgage stress test and CMHC calculator
Short answer
In Canada you must qualify at the greater of your contract rate plus 2% or 5.25%, with housing costs at most 39% of gross income (GDS) and all debts at most 44% (TDS). With less than 20% down, a CMHC premium of 2.80% to 4.00% is added to the mortgage.
Check what you qualify for
Household, before tax
50% counts toward GDS/TDS
Car loans, credit cards, lines of credit
Maximum purchase price
$556,677
Mortgage up to $512,075 + your $60,000 down · limited by income
Qualifying rate
6.50%
Contract 4.50% + 2% or 5.25% floor
Max payment allowed
$3,430.00
GDS is the tighter limit
Payment at your rate
$2,834.19
On $512,074 incl. CMHC
CMHC premium
$15,397
3.10% added to the loan
What are the formulas and rules?
1. Qualifying rate (OSFI stress test)
qualifying rate = max(contract rate + 2.00%, 5.25%)
2. Gross debt service (GDS) — at most 39%
GDS = (mortgage payment + property tax + heating + 50% × condo fees) ÷ gross monthly income
3. Total debt service (TDS) — at most 44%
TDS = (GDS housing costs + all other debt payments) ÷ gross monthly income
4. Maximum mortgage
max payment = min(39% × income − housing costs, 44% × income − housing costs − other debts)
max mortgage = payment × (1 − (1 + i)^−n) ÷ i, with i = (1 + q/2)^(1/6) − 1 and n = 300
5. Minimum down payment (since December 15, 2024)
- Up to $500,000: 5%
- $500,000 to $1,499,999: 5% of the first $500,000 + 10% of the rest
- $1,500,000 or more: 20%, and the mortgage cannot be insured
6. CMHC premium (added to the mortgage)
| 5.00% to 9.99% down | 4.00% |
| 10.00% to 14.99% down | 3.10% |
| 15.00% to 19.99% down | 2.80% |
| 20% or more down (conventional) | 0% |
| 30-year amortization surcharge | +0.20% |
7. Provincial sales tax on the premium (cash at closing)
Ontario 8%, Quebec 9%, Saskatchewan 6%; no PST on the premium elsewhere.
How much can you borrow on $120,000?
At a 4.5% contract rate you are tested at 6.50%. With $4,200 of property tax, $120 of heating and $400 of other debt payments, the GDS limit allows a mortgage payment of $3,430.00 a month.
That supports a mortgage of about $512,075. With $60,000 down the most you can pay for a home is $556,677, including the CMHC premium of $15,397.
What does CMHC insurance cost on a $700,000 home?
With 10% down ($70,000), the 3.10% premium is $19,530, so the mortgage becomes $649,530. In Ontario you also pay $1,562.40 of PST on the premium in cash, for $71,562.40 needed at closing before land transfer tax and legal fees.
How do I work out the mortgage you qualify for in Canada?
- 1
Find your qualifying rate
Take the greater of your contract rate plus 2% or 5.25%. Lenders test your payment at this rate.
- 2
Work out your housing limit (GDS)
Multiply your gross monthly income by 39%, then subtract property tax, heating and half of any condo fees. What is left is the most your mortgage payment can be.
- 3
Work out your total debt limit (TDS)
Multiply gross monthly income by 44%, subtract the same housing costs and your other debt payments. The smaller of the GDS and TDS amounts is your limit.
- 4
Turn the payment into a mortgage
Find the mortgage that this payment repays over 25 years at the qualifying rate, using semi-annual compounding.
- 5
Check the down payment and CMHC premium
Make sure your down payment meets the minimum for the price, and add the CMHC premium to the mortgage if you put down less than 20%.
Frequently asked questions
What is the mortgage stress test rate in 2026?
You must qualify at the greater of your contract rate plus 2% or 5.25%. At a 4.5% contract rate, you qualify at 6.50%.
How much mortgage can I get on a $120,000 income?
With $60,000 down, a 4.5% rate, $4,200 of property tax, $120 a month for heating and $400 of other debt payments, you qualify for about $512,075 and a home of up to $556,677.
Is CMHC insurance added to my mortgage?
Yes. The premium is added to the mortgage. On a $700,000 home with 10% down, the 3.10% premium of $19,530 raises the mortgage from $630,000 to $649,530.
Do I pay tax on CMHC insurance?
In Ontario (8%), Quebec (9%) and Saskatchewan (6%), provincial sales tax applies to the premium and must be paid in cash at closing. In the Ontario example that is $1,562.40.
Can I buy a $1.2 million home with less than 20% down?
Yes, since December 15, 2024. Homes under $1.5 million can be insured. The minimum down payment on $1.2 million is $95,000: 5% of the first $500,000 and 10% of the rest.
Where do these numbers come from?
The stress test follows OSFI's minimum qualifying rate, and the GDS and TDS limits, premiums and down payment rules follow CMHC. Lenders can be stricter. Math uses decimal arithmetic and semi-annual compounding.