Effective June 1, 2021 the stress test increased from 4.79% to 5.25% for all home buyers applying for a mortgage.

If you aren’t aware, the stress test is in place to protect Canadian homeowners should interest rates spike in the future by ensuring that they can continue to pay your mortgage at a higher interest rate.

With the stress test change, all home buyers will need to qualify for 5.25% (previously 4.79%) even though you may be approved for a mortgage at 2.2%.

For a median-income household, this will reduce their approved purchase price from $1,000,000 to $955,000 according to the Financial Post.