The benchmark rate used to determine the minimum qualifying rate for insured mortgages is known as the “stress test."

A home buyer getting an insured mortgage (required with less than 20 per cent downpayment) must prove they can afford a payment based on the stress test. The Office of the Superintendent of Financial Institutions (OSFI) in Canada sets this requirement at 5.25 per cent, or the interest rate you negotiate with your lender plus 2 per cent, whichever is higher.

This stress test ensures home buyers are able to afford their homes even if:

• interest rates rise;
• incomes change; or
• home buyers are faced with unforeseen expenses.

When a borrower has less than a 20 per cent down payment, they are required to obtain government-backed mortgage insurance. Mortgage loan insurance is only available when the purchase price is below $1,000,000. For properties valued greater than one million, at least a 20 per cent down payment is required.

Here’s what this means to the buyer of a benchmark price home in Greater Vancouver:

Impact of stress test change

October 31, 2023 benchmark price for an apartment in Greater Vancouver. 

Impact of stress test change

October 31, 2023 benchmark price for an attached home in Greater Vancouver.

Impact of stress test change

October 31, 2023 benchmark price for a detached home in Greater Vancouver.

Loan amount includes mortgage insurance fee. Income required does not include taxes, heat and other costs.

These tables are for illustration purposes only. Buyers should work with a mortgage finance professional to determine the loan costs for any property.