Do all mortgage lenders use the stress test?

Of Course not all mortgage lenders use the stress test. The test is mainly for those seeking a mortgage with federally regulated lenders even though there are provincially regulated lenders that also use it. There are plenty of mortgage lenders at the provincial level who don’t use the stress test. They may just charge higher interest rates than the minimum the big banks charge.

How can I avoid the mortgage stress test?

Stress tests are mandated for anyone looking to get a mortgage loan from a federally regulated lender such as the major banks in Canada. Therefore the only way to avoid a stress test is to borrow from a provincially regulated lender, such as a credit union. Your mortgage also needs to be uninsured for it to work. The downside is that you may end up paying a higher rate.

chalk, Author at WealthRocket

Q: What is the mortgage stress test?

A mortgage stress test is a test conducted by a lender to determine how suitable a borrower is for a particular mortgage amount. It is basically a simulation of the worst case scenario in the borrower’s income to determine if they can pay the mortgage under suich tough circumstances. All will-be home buyers are expected to pass this test in Canada, depending on whether they are insured or uninsured.