The Mortgage Stress Test at Toronto Prices, Home Type by Home Type

The short answer

The mortgage stress test in Ontario is a federal rule, so it works the same in Toronto as anywhere else in the province. What makes it bite harder here is the price of the homes it is applied to. A federally regulated lender such as a bank has to check that you could carry your mortgage at a qualifying rate that is higher than the rate you will actually pay.

That qualifying rate is the greater of 5.25% or your contract rate plus 2%. The Office of the Superintendent of Financial Institutions (OSFI) sets it for uninsured mortgages. The Financial Consumer Agency of Canada (FCAC) says banks apply the same test to insured mortgages.

Below we apply the test to the median Toronto price for each home type in August 2026, as reported by the Toronto Regional Real Estate Board (TRREB). Every payment is our own calculation using semi-annual compounding. This is general information, not mortgage advice, so confirm your own numbers with a lender or mortgage professional.

How the qualifying rate works in 2026

OSFI describes the minimum qualifying rate as having two parts. The buffer, currently 2%, is added to your contract rate. The floor, currently 5.25%, is the lowest rate a lender can test you at. OSFI says it reviews both at least once a year, so check its page when you apply.

Contract rate (illustrative)	Contract rate plus 2%	Rate the lender tests you at
3.00%	5.00%	5.25%, because the floor is higher
3.25%	5.25%	5.25%
4.00%	6.00%	6.00%
5.00%	7.00%	7.00%

The contract rates are examples, not quotes. At lower rates the floor sets the test. Once your contract rate passes 3.25%, the buffer takes over and the test rises with your rate.

What the stress test means at Toronto’s median prices

This table takes TRREB’s August 2026 median price for each home type in the City of Toronto and applies the FCAC minimum down payment rules. The payments assume a 25 year amortization, a 4.00% contract rate and a 6.00% qualifying rate. They leave out the mortgage loan insurance premium, which FCAC says you typically need with less than 20% down.

Home type (City of Toronto)	Median price, August 2026	Minimum down payment	Mortgage	Payment at 4.00%	Payment tested at 6.00%
Condo apartment	$550,000	$30,000	$520,000	$2,735	$3,327
Condo townhouse	$661,650	$41,165	$620,485	$3,264	$3,970
Freehold townhouse	$962,000	$71,200	$890,800	$4,686	$5,699
Semi-detached	$981,000	$73,100	$907,900	$4,776	$5,809
Detached	$1,170,000	$92,000	$1,078,000	$5,670	$6,897

Two things stand out. The gap between the payment you would make and the payment you are tested on runs from about $590 a month for the median condo apartment to about $1,230 for the median detached house. And every median in the table sits below $1.5 million, so each of them could be bought with less than 20% down under the current federal rules, as long as the stress test is passed.

A median is the middle sale, not a typical home in any one neighbourhood. For how prices move across the city, see our page on Toronto house prices.

A worked example: a Toronto condo apartment at the median

This is an illustration with round numbers, not a real client and not a mortgage quote.

A first-time buyer buys a condo apartment at the August 2026 median of $550,000 with the minimum down payment of $30,000, which is 5% of the first $500,000 plus 10% of the $50,000 above it. The mortgage is $520,000. Because the buyer is a first-time buyer with less than 20% down, FCAC says the maximum amortization is 30 years. The contract rate offered is 4.00%, so the qualifying rate is 6.00%.

We assume property tax of $250 a month, heating of $75 a month and a condo fee of $650 a month. FCAC counts half the condo fee, so $325 goes into the calculation.

	At the 4.00% contract rate	At the 6.00% qualifying rate
Mortgage payment, 30 years	$2,473	$3,093
Property tax, illustrative	$250	$250
Heating, illustrative	$75	$75
Half the condo fee, illustrative	$325	$325
Monthly housing costs	$3,123	$3,743
Gross annual income for 39% GDS	$96,092	$115,169

The income line is the monthly housing costs divided by 0.39, then multiplied by 12. The buyer would pay about $2,473 a month on the mortgage, but needs an income that supports $3,093. In this example that is a gap of roughly $19,000 in gross annual income. Over 25 years instead of 30, the tested payment on the same $520,000 would be about $3,327.

To try your own figures, use our Toronto mortgage calculator.

Why condo fees and property tax weigh on the result

FCAC describes two ratios. Gross debt service (GDS) is your housing costs as a share of gross income and should not be more than 39%. Housing costs are the mortgage payment, property taxes, heating and 50% of any condo fee. Total debt service (TDS) adds your other debts, such as credit cards, car loans, lines of credit and student loans. TDS should not be more than 44%.

Condo apartments made up 885 of the 1,767 sales in the City of Toronto in August 2026, according to TRREB, so the condo fee matters to a lot of Toronto buyers. Two units at the same price can qualify quite differently if one has a much higher monthly fee. Before you firm up an offer, our guide to the condo status certificate in Toronto explains where the real fee and any declared increase show up.

Property tax is the other variable. The City of Toronto’s 2026 total residential tax rate is 0.767311%, applied to the property’s assessed value from the Municipal Property Assessment Corporation (MPAC), not to the price you pay. That works out to about $767 a year for every $100,000 of assessed value. Our post on Toronto property tax explains how the bill is built.

Down payments and insured mortgages at Toronto prices

FCAC’s minimum down payment rules are 5% of the purchase price up to $500,000, then 10% on the portion from $500,000 to $1.5 million and 20% of the price at $1.5 million or more. FCAC says you will typically need mortgage loan insurance if you put down less than 20%.

Finance Canada raised the price cap for insured mortgages from $1 million to $1.5 million on December 15, 2024. On the same day, 30 year amortizations became available to all first-time buyers and all buyers of new builds. Some older text on the FCAC down payment page still refers to the $1 million cap, so rely on the Finance Canada announcement for the current figure.

For a Toronto buyer, the practical effect is that a median detached house in August 2026 needed $92,000 down rather than 20%. The stress test is what stands between that down payment and an approval. The FHSA and the Home Buyers’ Plan are the two federal programs most first-time buyers use to build it.

Remember that the down payment is only part of the cash you need. A Toronto purchase carries two land transfer taxes, the provincial tax and the City of Toronto’s municipal tax. Our Toronto land transfer tax calculator shows both, including the first-time buyer refund and rebate.

Renewals, switches and refinancing

The test mostly matters at purchase, but it can return later.

• Switching lenders at renewal. OSFI does not expect lenders to apply the qualifying rate to an uninsured straight switch, meaning a move to another lender with no increase to the amortization or the loan amount. Finance Canada says insured borrowers can also switch at renewal without another stress test.
• Refinancing or a home equity line of credit. FCAC says you will need to pass the stress test if you refinance or take out a home equity line of credit.
• Lenders that are not federally regulated. FCAC notes that these lenders may also ask you to pass a stress test, so ask any lender how it qualifies you.

Before you book showings

1. Get a pre-approval and ask which qualifying rate and amortization the lender used.
2. Ask for your GDS and TDS ratios, as well as the maximum price.
3. For each condo you like, find the monthly fee and check that half of it fits within your approval.
4. Estimate the property tax from the assessed value, not the asking price.
5. Budget separately for both land transfer taxes, legal fees and adjustments.
6. Re-check your approval if rates move or you take on new debt before you offer.

Our guide for first time home buyers in Toronto shows how we build a search around an approval and our buyer page covers how we write offers. If you want to test a pre-approval against real Toronto listings, contact us.