How do lenders assess my ability to repay a bridge loan?
Lenders primarily evaluate your demonstrated ability and willingness to service your debt obligations, consistent with OSFI's Guideline B-20.
Key Points
Lenders will check your credit history to see how you've managed debt in the past.
Lenders will look at your GDS and TDS ratios, using a higher interest rate to make sure you can afford the loan.
You'll need to provide proof of income and employment to show you can repay the bridge loan.
Lenders will check if you can still afford your mortgages if interest rates rise.
Lenders must follow careful lending practices to make sure you can manage your mortgage payments.
Technical Research Verification
Our systems synchronized 3 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.