Mortgage Stress Test: What to Expect in 2026

Canada’s mortgage stress test has been one of the biggest barriers to homeownership over the past few years. As interest rates rose sharply in 2022–2024, many buyers were priced out—not by payments, but by qualification rules.

Heading into 2026, the stress test is still in place, but the way it impacts buyers, renewals, and refinancing is changing. Here’s what Canadians should expect.

1. The Mortgage Stress Test Isn’t Going Away in 2026

As of now, there are no confirmed plans to remove the stress test in 2026.

All federally regulated lenders (banks and major institutions) will continue to require borrowers to qualify at the higher of:

• The contract mortgage rate + 2%, or

• The Minimum Qualifying Rate (MQR) set by OSFI

This applies to:

• Purchases

• Refinances

• Switching lenders (with some exceptions)

2. Why the Stress Test Feels Easier Than Before

While the rules haven’t changed, rates have.

As mortgage rates declined through late 2025, the qualifying rate dropped as well.

Example:

• Mortgage rate: 4.25%

• Stress test rate: 6.25%

That’s far more manageable than the 8%+ qualifying rates buyers faced in 2023–2024.

Result:

• Higher approval amounts

• Fewer declined applications

• Easier qualification for first-time buyers

3. Stress Test Impact on First-Time Buyers in 2026

First-time buyers benefit the most from improving rate conditions.

In 2026:

• Lower stress-test rates increase buying power

• Monthly affordability improves

• Down payment strategies (FHSA + RRSP HBP) become more effective

• Fewer buyers are forced into smaller or less desirable homes

However, income and debt ratios still matter — budgeting remains critical.

4. What Renewing Homeowners Should Expect

Homeowners renewing in 2026 face a different stress-test reality depending on their lender choice.

Staying With the Same Lender:

• No stress test required

• Renewal is simpler and faster

Switching Lenders:

• Full stress test applies

• Qualification is required again

Many homeowners who took ultra-low rates in 2020–2021 may find switching difficult without income growth.

5. Refinancing Still Triggers the Stress Test

If you refinance in 2026:

• You must re-qualify under the stress test

• Increased loan amounts face stricter scrutiny

• Debt consolidation must fit ratios

Even with lower rates, stress-test rules still limit how much equity can be accessed.

6. Could Stress Test Rules Change in 2026?

While there’s growing industry pressure to reform the stress test, any changes would likely be incremental, not dramatic.

Possible discussions include:

• Adjusting the +2% buffer

• Creating exemptions for renewals

• Tweaking rules for first-time buyers

But borrowers should plan as if the current framework remains in place.

7. How Buyers Can Prepare for the 2026 Stress Test

✔ Improve credit scores before applying

✔ Reduce consumer debt

✔ Increase down payment where possible

✔ Choose shorter-term or insured products

✔ Work with a broker to access non-bank lenders

Preparation can increase approval amounts by tens of thousands of dollars.

8. Non-Bank Lenders Offer Stress-Test Flexibility

Some alternative and monoline lenders:

• Apply different qualification methods

• Offer exceptions for strong equity positions

• Provide better solutions for self-employed borrowers

These options are especially valuable in 2026.

Final Thoughts

The mortgage stress test will still be part of Canada’s housing landscape in 2026 — but it’s becoming less restrictive as rates normalize. Buyers, refinancers, and renewing homeowners will find more opportunity than in recent years, provided they plan strategically.

Understanding how the stress test works — and how to work around it legally — is key to success in 2026.

If you’d like, I can turn this into a RateShop buyer guide, stress-test calculator, or educational carousel.