200 Basis Points or 2 Percentage Points: Same Stress Test, Clearer Wording

A borrower with a 4% contract rate who reads "plus 2%" as "4.08%" has just underestimated their qualifying rate by almost two full points. That misreading is why the stress test is now better described as the contract rate plus 2 percentage points, or 5.25%, whichever is higher.

The rule itself hasn't changed. 200 basis points and 2 percentage points are the same number, and OSFI's minimum qualifying rate for uninsured mortgages, as confirmed in January 2026, still works exactly this way. The clearer wording matters because it tells you how to do the math, and the math decides how much you can borrow on a purchase or a refinance.

Add two full points, then check the floor

The buffer is added flat to your rate. It is never a percentage of your rate. In an illustrative example, a 4.19% contract rate qualifies at 6.19%. A 3.00% contract rate would qualify at 5.00% on the buffer alone, so the 5.25% floor takes over instead. The floor applies whenever the contract rate is below 3.25%.

Where rate shopping stops helping approval

This is the part that changes hedging decisions. Above a 3.25% contract rate, every bit of rate you save lowers your qualifying rate by the same amount, which can raise the size of mortgage you qualify for. Below 3.25%, everyone qualifies at 5.25%, so a sharper discount lowers your payment but leaves your approval amount unchanged.

So split the decision in two. First, work out your qualifying rate both ways and use the higher one to see what you'll be approved for. If you're self-employed, run this against the income your lender will actually accept from your documents, since that figure usually sets the ceiling sooner than the rate does. Second, once you know you're under the floor, choose fixed or variable on cost and on how much payment movement your cash flow can absorb. At that point the stress test has already priced in the qualifying risk, and the rate decision is yours alone.