The short answer
What the lender calculates
It takes the higher of: contract rate + 2 points, or 5.25%. It then checks that your debt ratios stay under the limits with the payment calculated at that rate. For an insured loan, your lender tells you the qualifying rate it uses.
An example
Actual ratios also depend on heating, taxes and your other debts. The $2,300 payment is a fixed maximum here, to show the effect of the rate.
What can help you pass
Pay down the debts that weigh on the ratio (cards, line of credit, car loan), add a co-borrower, raise the down payment, compare lenders: policies vary.
Frequently asked questions
Does the test change my actual rate?
No. It only qualifies you.
Can the qualifying rate change?
It follows the contract rate. OSFI has kept the 5.25% floor; check the value in force before you buy.
Can a broker get around the test?
No. A broker can choose a lender whose policy suits your file.