New Stress Test Qualifications as of June 1st. 2021
Dave Lacusta • May 24, 2021
As of June 1st. 2021, if you’re looking to qualify for mortgage financing (either uninsured or insured), you will have to qualify at the greater of the contract rate plus 2% or a new “floor rate” of 5.25%.
A little background.
In early April, the Office of the Superintendent of Financial Institutions (OSFI) proposed changes to the stress test for uninsured mortgages and invited feedback from the public closing in early May 2021. Last Thursday, OSFI announced they would be moving ahead with the proposed changes to uninsured mortgages.
Immediately following OSFI’s announcement, the Department of Finance made an announcement indicating that they would follow suit and apply the same changes to the stress test on insured mortgages as well.
“The recent and rapid rise in housing prices is squeezing middle-class Canadians across the entire country and raises concerns about the stability of the overall market,” Finance Minister Chrystia Freeland said in a statement. “The federal government will align with OSFI by establishing a new minimum qualifying rate for insured mortgages… It is vitally important that homeownership remains within reach for Canadians.”
What you need to know.
It is estimated that these changes to the stress test will impact 1 in 5 mortgage applications and will reduce buying power by roughly 4% to 4.5%.
The government will review the stress test qualifying rate annually (every December) and communicate any changes well before the spring market.
After June 1st. 2021, you will have to qualify at the great of the contract rate or the floor rate of 5.25%.
If you have an active mortgage or pre-approval in place (before June 1st, 2021), please don’t hesitate to get in touch to see if these recent government changes impact you.
Recent Articles
On October 28, 2026, the Bank of Canada raised its key interest rate by 0.25%, bringing it to 2.5%. If you have a mortgage, are shopping for a home, or have a renewal coming up, this decision matters. Here is a plain-language look at what changed, why it happened, and what it could mean for you.
Renewing your mortgage before a move? Compare short terms, open mortgages and potential penalties so your next mortgage fits your Surrey selling plans.
What Lenders Mean by “Good Credit” When You Apply for a Mortgage Credit is simply the ability to borrow money today based on the trust that you’ll repay it in the future. When you apply for a mortgage, lenders want proof that you’ve consistently honoured that trust by managing credit responsibly. But what does a good credit history actually look like to a lender? The 2 / 2 / 2 Rule Explained If you’re newer to credit or want a simple way to remember minimum mortgage credit requirements, think of the 2 / 2 / 2 rule: 2 active trade lines Established for at least 2 years With a minimum combined limit of $2,000 This is a common baseline lenders use when assessing credit for mortgage financing. What Counts as a Trade Line? A trade line is any account where credit is extended to you, such as: A credit card A line of credit A car loan A personal or installment loan Each trade line reports your payment history to the credit bureau and contributes to your credit score. For a trade line to be considered active , it must: Have been used at least once, and Show activity at least once every three months Why Time Matters Lenders want to see that you’ve managed credit responsibly over time , not just recently. Using two trade lines consistently for at least two years helps demonstrate stable financial habits and reliability. Understanding Credit Limits vs. Balances The credit limit is what matters—not the balance. For example: A $1,000 credit card + a $2,500 line of credit = $3,500 total limit This meets the minimum requirement You do not need to carry a balance to build credit. In fact, the best approach is to: Use your credit regularly Pay it off in full each month (for credit cards) Make all loan payments on time If your lender offers a credit limit increase and you’re managing credit well, it’s often a good idea to accept it. Higher limits—used responsibly—can strengthen your credit profile. A Simple Way to Build Credit Automatically One effective strategy is to: Put recurring bills on your credit card Set up an automatic transfer to pay the balance in full every month Automation helps build positive credit history without requiring constant attention—just be sure to monitor your accounts to ensure everything runs smoothly. What About Credit Scores? Yes, credit scores matter—but they’re not the whole story. If you: Have two active trade lines Established for two years With at least $2,000 in total limits And no missed payments …your credit score will generally take care of itself. That said, it’s still wise to review your credit report occasionally to check for errors or unfamiliar accounts. Final Thoughts If you’re thinking about buying a home in the next couple of years, now is the perfect time to review your credit and make sure you’re on track. Small adjustments today can make a big difference when it’s time to apply for a mortgage. If you’d like help reviewing your credit or understanding how it affects your mortgage options, feel free to connect anytime. I’d be happy to walk through it with you and help you plan with confidence.
