A complete breakdown of income requirements for Ontario home buyers in 2026
The mortgage stress test is one of the most important—and often misunderstood—aspects of buying a home in Ontario. Implemented by the federal government to ensure borrowers can handle higher interest rates, the stress test determines how much income you need to qualify for a mortgage.
In this guide, we'll break down exactly how the stress test works, what income is required for different price points, and how factors like condo fees and existing debt impact your qualification.
The mortgage stress test requires borrowers to qualify at a rate higher than their actual mortgage rate. This ensures you can still afford payments if rates increase in the future.
You must qualify at your actual mortgage rate plus 2 percentage points. For example, if your negotiated rate is 5.50%, you must prove you can afford payments at 7.50%.
Alternatively, you must qualify at the BoC's benchmark rate, whichever is higher. This rate is updated periodically by the Bank of Canada.
Note: The stress test applies to all mortgages with federally regulated lenders (banks, credit unions). Provincial lenders and private lenders may have different requirements.
A $700,000 home is common for first-time buyers in Ontario outside the GTA. Here's exactly how much income you need to qualify.
To pass the stress test with a 39% TDS ratio (maximum allowed), you need a minimum annual income of approximately $134,000.
This assumes you have no other debt (car payments, credit cards, etc.)
A $1 million home is entry-level in the Greater Toronto Area. Here's the income required to qualify in Ontario's most competitive market.
To pass the stress test with a 39% TDS ratio (maximum allowed), you need a minimum annual income of approximately $192,500.
This assumes you have no other debt. Any car payments, credit card debt, or student loans will increase this requirement.
Condo fees can significantly impact your mortgage qualification. Unlike property taxes and heating, condo fees are added directly to your debt calculations.
Condo fees are included in your Total Debt Service (TDS) ratio calculation, which means they directly reduce how much income is available for your mortgage payment.
| Monthly Condo Fee | Additional Income Needed ($700K Home) | Additional Income Needed ($1M Home) |
|---|---|---|
| $300/month | +$9,230/year | +$13,200/year |
| $500/month | +$15,380/year | +$22,000/year |
| $700/month | +$21,540/year | +$30,800/year |
| $1,000/month | +$30,770/year | +$44,000/year |
Important: Condo fees can increase over time. Lenders may also factor in a 10% buffer for potential fee increases when calculating your qualification.
Lenders use two key ratios to determine how much mortgage you can afford: GDS and TDS. Understanding these limits is crucial for passing the stress test.
Gross Debt Service measures your housing costs as a percentage of gross income.
39%
Maximum allowed
Total Debt Service includes all debts plus housing costs.
44%
Maximum allowed
Pro Tip
Lenders typically prefer ratios below 36% (GDS) and 42% (TDS) for the best rates. Staying below these thresholds gives you more flexibility.
The mortgage stress test rules are set by the federal government, with the Bank of Canada playing a key role in determining the benchmark rate used for qualification.
Source: Bank of Canada - Mortgage Stress Test Guidelines. For the most current benchmark rate, visit bankofcanada.ca.
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