What is the mortgage stress test rate — and how does it affect London buyers?
The stress test is the minimum rate lenders must use to check you can afford a mortgage — it applies to London buyers as it does everywhere in Canada. Here's the current rate and what it means for your borrowing power.
The minimum interest rate banks must use when testing whether you can afford a mortgage. Set by OSFI, Canada's banking regulator. Borrowers must qualify at this rate or their contract rate plus 2%, whichever is higher.
As of July 2026, London's strongest market signal is Hold at 66% — Buy 49%, Hold 66%, Sell 46%.
Market conditions currently favour holding — inventory is balanced and supply and demand are in balance.
What this means for you
You must qualify at this rate (or your contract rate + 2%, whichever is higher), so a higher stress test shrinks the mortgage you qualify for — even if your actual rate is lower.
A tougher stress test means fewer qualified buyers, which can soften demand for higher-priced homes.
London market context
A mid-size southwestern Ontario market anchored by a big university and health-care sector, with steadier prices than the GTA.