Mortgage term
Stress test (B-20)
Definition
The OSFI stress test requires uninsured borrowers to qualify at the greater of their contract rate + 2%, or 5.25%. Since November 2024, borrowers switching lenders at renewal without increasing loan or amortization are exempt.
The stress test was introduced in 2018 to reduce household leverage. It still applies to new mortgages, refinances, and mortgages where the amount or amortization is increasing at renewal.
The November 2024 exemption for straight renewal-switches is one of the most important regulatory changes for Canadian homeowners in a decade — it removed the biggest barrier to shopping your renewal.