What is the mortgage stress test and does it still apply?

The stress test (OSFI Guideline B-20) reduces the mortgage you qualify for by roughly 20% compared with your actual payment.

• Applies to — banks and federally regulated lenders on purchases, refinances and increases.
• Does not apply to — insured mortgage holders switching lenders at renewal with the same balance and amortization; provincially regulated credit unions set their own policy.
• Workarounds that are real — a larger down payment, a longer amortization, paying off a car loan or line of credit, adding a qualified co-borrower.

Calculate your own limit before shopping: it prevents an offer collapsing at the financing condition.