BoC Drops Mortgage Qualifying Rate

Rate is used in stress tests for both insured and uninsured mortgages

A drop in the Bank of Canada’s rate used by mortgage stress tests, the first one since 2016.

The five-year benchmark qualifying rate is now 5.19%, down from 5.34%.

It’s the first decrease in the five-year fixed mortgage rate since September 2016 when the rate went from 4.74% to 4.64%.

The qualifying rate is used in stress tests for both insured and uninsured mortgages, and a lower rate means it is easier for borrowers to qualify.

The Bank of Canada’s five-year benchmark rate is calculated using the posted rates at the Big Six Banks.

These stress tests require potential home buyers to show they would still be able to make mortgage payments if faced with higher interest rates or less income.