Everything you need to know about stricter lending standards
If you've been keeping up with mortgage news, you might be feeling anxious. Headlines about "stricter lending standards," updated stress tests, and tighter debt rules can make anyone wonder: "Can I still qualify for a mortgage in 2026?"
The honest answer? It's different—but it's not impossible. In this guide, we'll break down exactly what's changed, what it means for you, and how to position yourself for success.
Lenders use two key ratios to determine how much you can afford: GDS (Gross Debt Service) and TDS (Total Debt Service). In 2026, these thresholds have been slightly adjusted.
| Ratio Type | Standard Limit | 2026 Guideline |
|---|---|---|
| GDS (Housing Costs) | 39% | 39-42% |
| TDS (All Debt) | 44% | 44-47% |
What This Means: The slight increase in allowable ratios means lenders have a bit more flexibility. However, maintaining lower debt levels (under 36% GDS, under 42% TDS) still gives you the best rates and approval chances.
The mortgage stress test remains one of the biggest hurdles for buyers. Here's what you need to know about how it works in 2026.
Currently at 5.25% (Bank of Canada's 5-year posted rate)
You must qualify at your offered rate plus 2%
With rates around 5.50%, you're being tested at approximately 7.50%
The Good News
While the stress test feels daunting, it's designed to protect you from future rate increases. If you can pass the stress test, you're well-positioned to handle rate changes.
Your credit score is one of the most important factors in mortgage approval. Here's what lenders are looking for in 2026.
| Credit Score | Approval Likelihood | Best Rates Available |
|---|---|---|
| 680+ | Excellent | Best rates |
| 620-679 | Good | Standard rates |
| 580-619 | Challenging | Higher rates |
| Below 580 | Difficult | Limited options |
Minimum Score: 620
Most lenders require a minimum credit score of 620 for standard approval. Some lenders may go as low as 580, but expect higher rates.
How much do you need to put down? The answer depends on the home price and your loan type.
Minimum for homes under $500,000 (CMHC insured)
For homes $500,000 - $1,000,000 (CMHC insured)
For homes over $1,000,000 (conventional mortgage)
Key Change: The insured mortgage limit has increased to $1.15 million (or $1.4M in high-cost areas like the GTA), meaning more buyers can qualify for CMHC insurance with less than 20% down.
Don't let confusion hold you back. Get a clear picture of what you can afford with a free pre-approval.