Minimum Qualifying Rate (MQR)
The stress test rate — the greater of 5.25% or your contract rate plus 2 percentage points — used by lenders to qualify you for a mortgage.
The Minimum Qualifying Rate (MQR) is the rate at which federally regulated lenders must qualify borrowers under OSFI's B-20 guideline. The MQR is the greater of 5.25% or the borrower's contract rate plus 2 percentage points. For example, a borrower with a 5.00% contract rate is qualified at 7.00%; a borrower with a 4.00% contract rate is qualified at 6.00% (floored at 5.25%). The MQR applies to both insured and uninsured mortgages, and is the operational core of the 'stress test'. The November 2024 straight-switch rule exempts lender switches at renewal for uninsured mortgages.
Related Terms
A mortgage qualifying rule requiring borrowers to prove they can afford payments at a rate higher than their actual contract rate — the greater of 5.25% or contract rate plus 2%.
The Office of the Superintendent of Financial Institutions' Residential Mortgage Underwriting Practices and Procedures guideline — the source of the stress test and most Canadian mortgage qualifying rules.
OSFI's November 2024 policy change that eliminated the stress test for uninsured mortgage renewals when switching lenders with unchanged amount, amortization, and payment schedule.