Qualifying rate: 6.04% · Minimum down payment: $120,000 (10%) · Required gross income: approximately $303,225/year. CMHC eligible at this price range.
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The Canadian mortgage stress test requires all new mortgage applicants to qualify at a rate 2% above their contract rate, with a minimum qualifying rate of 5.25%. For a $Over $1M purchase at today's contract rate of approximately 4.04%, the qualifying rate is 6.04%.
The stress test applies to purchases, refinances, and lender switches. Straight renewals at the same lender are exempt.
| Item | Amount |
|---|---|
| Representative purchase price | $1,200,000 |
| Minimum down payment (10%) | $120,000 |
| Mortgage amount | $1,080,000 |
| Contract rate (broker floor) | 4.04% |
| Stress test qualifying rate | 6.04% |
| Monthly P&I at qualifying rate (25yr amort) | $6,936 |
| Annual PITH (P&I + tax + heat) | $97,032 |
| Required gross income (32% GDS) | $303,225 |
| CMHC eligibility | Eligible — 3.1% premium ($33,480 added to mortgage) |
The qualifying income figure above is calculated using the federal Gross Debt Service (GDS) ratio of 32%. This means your total annual housing costs — principal, interest, property tax, and heat (PITH) — cannot exceed 32% of your gross annual income.
For a Over $1M home in Ontario with the assumptions above:
Annual P&I at qualifying rate: $83,232 + property tax (estimate: $12,000/yr) + heat (estimate: $1,800/yr) = total PITH of $97,032/yr.
At 32% GDS: $97,032 ÷ 0.32 = $303,225.
This is an estimate. Your lender will use your exact balance, amortization, property tax assessment, and may apply a Total Debt Service (TDS) ratio (maximum 44%) if you have other debt obligations. Actual qualifying income may differ.
Ontario charges a provincial Land Transfer Tax (LTT). Toronto buyers also pay a Municipal Land Transfer Tax at identical rates — doubling the LTT cost.
First-time buyer rebate: Ontario first-time buyers receive a provincial LTT rebate up to $4,000. Toronto adds a municipal rebate up to $4,475. Rebates apply automatically at closing through your lawyer.
For a Over $1M home in Ontario at a representative price of $1,200,000, estimated land transfer tax is approximately $20,475. Total closing costs including legal fees and title insurance are approximately $24,975.
Budget your total required funds as: down payment ($120,000) + closing costs (~$24,975) = approximately $144,975 in available funds at closing.
A Over $1M home in Ontario at $1,200,000 with 10% down is eligible for CMHC mortgage default insurance. The CMHC premium is 3.1% of the mortgage amount ( $33,480), which is added to your mortgage principal at closing.
CMHC insurance allows you to purchase with less than 20% down. The premium cost is typically recovered within a few years through the benefit of entering the market earlier than saving a full 20% down payment — though this depends on individual circumstances.
Based on the 2026 stress test rules, a Over $1M home in Ontario at approximately $1,200,000 requires approximately $303,225 in gross annual household income. This assumes a 10% down payment and a 32% GDS ratio. Your lender calculates your exact figure.
The qualifying rate is 6.04% — your contract rate of approximately 4.04% plus 2%, with a minimum of 5.25%.
A Over $1M home in Ontario with 10% down is CMHC-eligible. The premium is 3.1% of the mortgage amount, added to your principal.
For a representative Over $1M purchase in Ontario at $1,200,000, estimated closing costs are approximately $24,975 (land transfer tax ~$20,475 + legal fees ~$3,000 + title insurance ~$1,500). Budget your down payment plus closing costs for total funds required at closing.