Mortgage Glossary

The Mortgage Glossary: What is the Qualifying Rate?

Posted by Brad Speniel | May 22, 2015 at 1:11 pm

ESTIMATED READING TIME: 1 minute

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In 2010, the Department of Finance introduced the Qualifying Rate as a new way to assess borrower eligibility and ensure borrowers can handle their payments should rates begin to rise. Your lender will use the qualifying rate to calculate your debt service ratios, which must be at or below their guidelines. The qualifying rate is a 5-year rate published every week by the Bank of Canada. For terms less than 5 years and for all variable rate mortgages, the qualifying interest rate is used if it is higher than the contract rate.  For 5-year terms and longer, the qualifying rate is the contract rate i.e the rate your lender is offering you.

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