Contract rate versus qualifying rate
The contract rate is the interest rate used for the mortgage you pay. The qualifying rate is a higher test rate used to assess whether the household could handle higher borrowing costs. For example, a 4.50% contract rate plus two percentage points produces a 6.50% qualifying rate.
- 4.50% contract rate → 6.50% qualifying rate
- 3.00% contract rate → 5.25% floor
- A higher test rate produces a higher qualifying payment for the same mortgage
How it changes affordability
The calculator first determines how much monthly housing cost fits under the GDS and TDS reference limits. It then converts the mortgage-payment portion into a mortgage amount using the qualifying rate. As the qualifying rate rises, the mortgage amount supported by the same payment falls.
Use scenarios, not a single prediction
Try the current expected rate and then a higher rate to see how sensitive the purchase-price estimate is. This is a planning exercise; renewal rules, insured and uninsured mortgages, and individual lender policies can differ or change.
Worked scenarios at the floor and above it
Assumption A: a 3.00% contract rate plus two percentage points equals 5.00%, so the 5.25% floor is higher and becomes the qualifying rate. Assumption B: a 4.50% contract rate plus two percentage points equals 6.50%, so 6.50% becomes the qualifying rate.
The contract rate still determines the scheduled mortgage payment. The qualifying rate is used only for the affordability test, which is why a household can comfortably budget for the contract payment yet qualify for a smaller mortgage.
What this calculator can and cannot test
ToolsFA applies the published greater-of formula to the rate you enter and uses it in the debt-service calculation. It can show sensitivity to rates, income, debt and property costs.
It cannot determine whether a mortgage is insured or uninsured, whether a renewal or lender switch qualifies for an exception, or how a lender treats unusual income and debts. Confirm those details before relying on the result.
Step-by-step
How to use the affordability calculator
- 1Enter the mortgage contract rate you expect to receive.
- 2The calculator compares contract rate plus 2 percentage points with the 5.25% floor and uses the higher rate for qualification.
- 3Add income, debt, down payment and property costs, then select Calculate estimate.
- 4Repeat with a higher contract rate to measure how much the affordability estimate changes.
Frequently asked questions
Is the stress-test rate the rate I pay?
No. Mortgage payments use the contract rate. The higher qualifying rate is used to test borrowing capacity.
What is the current federal minimum qualifying rate?
OSFI states that the uninsured-mortgage minimum is the greater of the contract rate plus 2 percentage points or 5.25%.
Does every renewal require a new stress test?
Not always. OSFI says it does not expect the uninsured minimum qualifying rate to apply to a straight switch between federally regulated lenders when neither the loan amount nor amortization increases. Other changes and lender rules may still require qualification.
Try your own numbers
Canada House Affordability Calculator
Enter income, debts, down payment, interest rate and property costs, then select Calculate estimate to reveal the result and breakdown.
Related Canadian home-buying guides
Official sources
Sources reviewed October 6, 2026. Rules and lender policies can change.