New 2018 Stress Test

What does it do?

Calculates the maximum loan you can get qualified with the new 2018 stress test rule.

Where is it?

Tools > Affordability > Stress Test

Why do you care?

The new 2018 rule requires you to be qualified on a higher rate than what you'll receive. It's designed to test your purchase power even when rates increase.

How does stress testing work?

Imagine you make $100,000 in income. Great. Now based on your credit score, we find out that a lender is willing to give you a mortgage but the condition is that you can only spend 35% of your salary on your mortgage. So you only have $35,000 that you can spend on your loan payments.

So using the 35K and the stress test rate the Canadian mortgage app reverse calculates the maximum loan you can get so that the loan payments at the stress test rate work out exactly to be $35,000 in a year.

Btw, that 35% we mentioned earlier is called the GDS, gross debt service and it's based on your credit score and the particulr lender you work with. More on this in the Stress Test Tool. Try it out.

Where is it?
Tools > Affordability > Stress Test

All the best and happy 2018