How this calculator works
OSFI's Guideline B-20 requires federally regulated lenders to qualify uninsured mortgage borrowers at the minimum qualifying rate: the greater of the contract rate plus 2 percentage points and 5.25%. The calculator applies that rate to the same loan amount and amortization as the contract payment, then compares the two monthly payments. It uses a fixed-rate, constant-payment amortization with semi-annual compounding and monthly payments, the standard Canadian mortgage convention. It does not model variable-rate payment changes, term renewals, property taxes, heating costs, condo fees or the lender's gross debt service and total debt service limits. Insured mortgages are also commonly assessed at this qualifying rate, but the guideline's uninsured-mortgage rule is the one cited here.
Formula
Qualifying rate = max(contract rate + 2%, 5.25%). Monthly rate i = (1 + annual rate / 2)^(2/12) - 1. Monthly payment = L x i / (1 - (1+i)^-n), where L is the loan and n is the amortization in months. Payment increase = qualifying payment - contract payment.
Worked example
A $400,000 mortgage at 5.5% over 25 years has a contract payment of $2,441.57. The qualifying rate is 7.5%, and the qualifying payment is $2,926.22, which is $484.65 or 19.85% more. At a 3.0% contract rate the qualifying rate is 5.25%, because 3.0% plus 2% is 5.0%.
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Frequently asked questions
Is the qualifying rate 5.25% or the contract rate plus 2%?
The greater of the two. The 5.25% floor binds only when the contract rate is below 3.25%.
Does this change my actual payment?
No. It tests whether you could afford the payment at the qualifying rate. The contract payment is unchanged.
Which mortgages does B-20 cover?
Federally regulated lenders apply the guideline to uninsured mortgages. Insured mortgages are also commonly assessed at the same minimum qualifying rate.
Does the calculator include other housing costs?
No. It compares principal and interest only, not property taxes, heating, condo fees or the lender's debt service ratios.