Before you shop, it helps to know what you can borrow, and the answer runs through the mortgage stress test. It is the rule that has you qualify at a higher rate than you will actually pay, as a cushion. Here is what shapes the number and how the stress test works in plain language.
Steady, provable income is the starting point.
Lenders weigh your debt load using GDS and TDS ratios (housing, then total debts, against income).
You must qualify at a higher rate than your actual one. See below.
More down can mean more buying power and lower costs.
A solid history supports the amount you qualify for.
Lenders qualify you at the higher of your contract rate plus 2 percent, or a minimum qualifying rate set by the regulator. The point is the same either way: you are tested against a higher rate than the one you pay, so there is room if rates rise. It is a built-in cushion, not your real payment, and the minimum can change over time.
Paying down balances frees up room under the GDS and TDS ratios.
More down can lift what you qualify for and lower your costs.
On-time payments and lower balances support a stronger application.
Bring us your income, your debts, and your down payment, and we will work out a realistic range and what the stress test means for you. A licensed member of our team will follow up.
Start a conversationInformation here is general and educational. It is not financial, legal, or lending advice, and it is not an offer of financing. The mortgage stress test, qualifying rules, and the minimum qualifying rate are set by regulators and lenders and can change; the figures shown are illustrative only and are not a rate offer. A pre-qualification is an estimate subject to lender review and approval, not a guarantee. All financing is subject to lender review, property review, and supporting documentation. Submission of a form does not guarantee approval or financing.