The stress test is the budget — not the contract rate

The single most expensive mistake we see in BC buyers is anchoring on the contract rate when setting a target price.

OSFI’s B-20 guideline requires federally-regulated lenders to qualify you at the greater of your contract rate + 2% or the federal benchmark (5.25% as of writing). Practically, that means your qualifying payment — the one the bank actually approves you against — is materially higher than the contract payment you’ll write each month.

If you build your search around the contract payment, you risk one of two outcomes:

1. The lender pulls you back at qualification — usually right after you’ve put down a deposit.
2. You qualify, but your real GDS/TDS ratios are uncomfortably tight, and any rate move at renewal stretches you thin.

The fix is mechanical. Use our Mortgage Modeler to set your target list price from the stress-tested payment, then negotiate the contract rate down from there. The contract savings are upside; the stress payment is the budget.