First-time home buyers and the stress test
First-time buyers pass the same stress test as everyone: contract rate + 2 points or 5.25%, which is 6.12% at the August 2026 insured average. What differs is the 30-year insured amortization, open to first-time buyers since December 15, 2024. It lifts the highest price you pass by about 5.7% to 5.8%. You need 5% down on the first $500,000.
Which stress test rules matter most for first-time buyers?
First-time buyers face the same test as everyone else: the lender qualifies you at the greater of your contract rate plus 2 points or 5.25%. At the Bank of Canada's August 2026 average for new insured 5-year fixed loans, 4.12%, that's 6.12%. With less than 20% down your loan is insured, and four insured rules shape what you can buy:
- Housing costs and debts are capped at 39% (GDS) and 44% (TDS) of gross income, at the qualifying rate.
- A minimum down payment of 5% on the first $500,000 and 10% on the rest.
- A price under $1,500,000. At $1,500,000 or more you need 20% down.
- A credit score of 600 for at least one borrower or guarantor.
The one rule that's different for you: since December 15, 2024, first-time buyers (and anyone buying a new build) can take an insured mortgage over 30 years instead of 25.
Qualifying rate, ratio caps and credit score for insured loans: Source: Justice Laws, Insurable Housing Loan Regulations (SOR/2012-282), ss. 5, 6 and 6(3.1), effective February 27, 2025. Checked .Terms on this page
- First-time buyer
- Who qualifies for the 30-year insured amortization is set out on CMHC's Home Start page; confirm with your lender before you plan around it.
- Amortization
- The number of years it would take to pay the mortgage off at today's rate and payment. Longer means a lower payment and more interest.
- Insurance premium
- A charge, usually added to the loan, on mortgages with under 20% down. Its rate depends on loan-to-value; it rises by 0.20% of the loan over 25 years.
- Condo fees in the test
- Lenders count 50% of monthly condo fees in GDS, alongside the mortgage, property tax and heating.
How much do you need for a down payment?
The minimum rises in steps with the price, and the insurance premium is based on how much you borrow against the price. Here's the minimum at several prices and the premium that goes with it:
| Price | Minimum down payment | Share of price | Premium at the minimum (25 years) |
|---|---|---|---|
| $400,000 | $20,000 | 5.00% | $15,200 (4.00% of the loan) |
| $500,000 | $25,000 | 5.00% | $19,000 (4.00% of the loan) |
| $750,000 | $50,000 | 6.67% | $28,000 (4.00% of the loan) |
| $1,000,000 | $75,000 | 7.50% | $37,000 (4.00% of the loan) |
| $1,250,000 | $100,000 | 8.00% | $46,000 (4.00% of the loan) |
| $1,499,000 | $124,900 | 8.33% | $54,964 (4.00% of the loan) |
| $1,500,000 | $300,000 | 20.00% | None: 20% down, not insurable |
The premium is added to the mortgage. Over 25 years add 0.20% to the premium rate. Computed from the federal minimums and CMHC's premium table.
Two things to notice. Just under $1,500,000 the minimum is about 8.3% of the price; at $1,500,000 it jumps to $300,000. And at the minimum you pay the top premium of 4.00%, which is also part of the loan you're stress tested on. Getting to 10% down drops the premium rate to 3.10%; the insured vs conventional comparison shows the trade-off at 10%, 15% and 20%.
How far does one first-time buyer's budget go?
A single buyer shopping for a first condo, with the fees that come with it:
Income $82,000, $38,000 saved, $320 a month on a car loan, and condos in their range charging about $400 a month in fees. Rate 4.12%, the August 2026 insured average.
| Income | $82,000Gross, one earner |
|---|---|
| Down payment saved | $38,000 |
| Other debts | $320 a month |
| Condo fees | $400 a month50% ($200) counts in GDS |
| Property tax, heating | 0.8% of price a year, $100 a monthOur planning estimates |
| Qualifying rate | 6.12%4.12% + 2 points |
| Most they pass at, 25 years | $356,800Premium 3.10%; real payment $1,750 a month |
| Most they pass at, 30 years | $377,600Premium 3.30% with the surcharge; real payment $1,692 a month |
| Minimum down payment at that price | $18,880They have $38,000, so savings aren't the limit |
| Same buyer, not first-time, at that price | Not insurable at 30 years30 years is only for first-time buyers and new builds |
| What 30 years adds | $20,800 (5.8%)And the payment you'd actually make is $58 a month lower |
The condo fees matter as much as the amortization. Without the $400 of fees, the same buyer would pass up to $381,400 at 25 years, $24,600 more. Half of every condo fee goes into the test as if it were part of your mortgage, so a building with high fees shrinks your budget even when the price looks the same.
In the calculator, switch the amortization to 25 to see the other column.
Open the 30-year version in the calculator →Rules: CMHC Home Start (30 years, premium surcharge), CMHC GDS/TDS (condo fees).Computed November 1, 2026.
Does a 30-year amortization help you pass the stress test?
Yes, modestly. Spreading the loan over 30 years lowers the payment the lender tests, so you qualify for more. For these first-time buyers, each with $300 a month of other debts and no condo fees:
| Income and savings | 25 years | 30 years | Difference | Actual monthly payment |
|---|---|---|---|---|
| $70,000, $40,000 down | $331,600 | $350,600 | +$19,000 (5.7%) | $1,601 → $1,548 |
| $90,000, $50,000 down | $430,500 | $455,200 | +$24,700 (5.7%) | $2,089 → $2,019 |
| $110,000, $60,000 down | $528,100 | $558,600 | +$30,500 (5.8%) | $2,570 → $2,484 |
| $130,000, $75,000 down | $630,400 | $666,500 | +$36,100 (5.7%) | $3,049 → $2,947 |
| $150,000, $85,000 down | $728,100 | $769,900 | +$41,800 (5.7%) | $3,531 → $3,413 |
The 30-year column includes the 0.20% premium surcharge. Property tax 0.8% of price a year (our estimate), heating $100 a month. Computed by our engine.
The extra 5 years lift the highest passing price by about 5.7% to 5.8%, roughly $30,500 for the $110,000 household, and the actual payment even falls a little despite the bigger loan. Your savings still have to cover the minimum down payment at the higher price.
The cost comes later. On a $450,000 loan at 4.12%, 25 years means about $268,900 of interest and 30 years about $331,400, if the rate never changed: roughly $62,400 more for a payment $226 a month lower. Rates will change at each renewal, so treat those totals as an illustration.
30-year insured amortization for first-time buyers and new builds, and the premium surcharge: Source: CMHC, Home Start: 30-year amortization for first-time buyers and new builds. Checked .Do condo fees count in the stress test?
Yes. CMHC's method for insured loans puts 50% of monthly condo fees into GDS, along with heating costs. Two condos at the same price can therefore lead to different approvals. In the worked example, $400 a month of fees costs the buyer $24,600 of buying power at 25 years. When you compare listings, put each building's actual fee into the GDS and TDS calculator rather than an average.
Heating counts too. CMHC asks for your actual or a reasonable estimate of heating costs; there's no official figure, so we use $100 a month as an example. If heat is included in the condo fee, ask the lender how it wants it shown.
CMHC: condo fees at 50% and heating costs in GDS: Source: CMHC, Calculating GDS / TDS. Checked .What credit score do you need?
For an insured mortgage, federal regulations require at least one borrower or guarantor to have a credit score of 600 or higher. CMHC restored that minimum in July 2021. It's a floor, not a target: individual lenders can ask for more. If your own score is below 600, a guarantor who meets it can satisfy the rule; co-signers and guarantors explains what they take on.
CMHC's 2021 return to the 600 score and 39% / 44% limits: Source: CMHC, CMHC reviews underwriting criteria (39% / 44%, 600 credit score restored), effective July 5, 2021. Checked .
Will you have to pass the stress test again later?
Not at renewal, if nothing else changes. Renewing with your current lender isn't retested, and since the Canadian Mortgage Charter insured borrowers can generally switch to another lender at renewal without requalifying, as long as the balance and amortization stay the same. You would have to pass again to refinance, borrow more against the home or add a home equity line of credit, according to the Financial Consumer Agency of Canada. Plan your budget around the payment you'll actually make, not the most you qualify for.
The Canadian Mortgage Charter on insured switches at renewal: Source: Department of Finance Canada, 2023 Fall Economic Statement, Chapter 1: the Canadian Mortgage Charter, effective November 21, 2023. Checked .Do the FHSA and Home Buyers' Plan change the stress test?
No. The First Home Savings Account and the RRSP Home Buyers' Plan are ways to build your down payment; they don't change the qualifying rate or the ratio limits. What they can change is how much you put down, which moves you along the tables above. Their contribution and withdrawal limits are outside this site's scope; a full purchase budget covers down payment savings and closing costs together.
What do first-time buyers get wrong about the test?
- Shopping at the maximum. The maximum is what a lender would approve at 6.12%, not what fits your life at 4.12%. Leave room for repairs, rate changes at renewal and the costs of owning.
- Treating 30 years as free. It lifts your maximum by about 5.7% to 5.8% in our table, but adds a premium surcharge and years of interest.
- Ignoring the condo fee. Half of it counts in the test, so a high-fee building can cost you tens of thousands of dollars of buying power.
- Assuming savings accounts change the rules. FHSA and Home Buyers' Plan money is down payment money; the qualifying rate and limits stay the same.
- Leaving credit to the last minute. The 600 minimum is a floor; errors on a report take time to correct.
What this means for you
- If you're starting to save: aim for the minimum down payment at your target price plus closing costs, and know that reaching 10% drops the premium rate a tier. The income needed calculator shows the income a target price takes.
- If you're ready to look: run your numbers on the stress test calculator at 25 and 30 years, with the actual condo fees and property tax of the places you're considering.
- If you're short of your target: work through every lever, ranked, before you take on a co-signer.
- If you're about to apply: check your credit report, gather your documents and read how pre-approval works.
Frequently asked questions
Do first-time buyers have to pass the stress test?
Yes. Every insured mortgage must qualify at the greater of the contract rate + 2 points or 5.25%, and uninsured loans at federally regulated lenders use the same test.
Can first-time buyers get a 30-year mortgage in Canada?
Yes. Since December 15, 2024, first-time buyers and buyers of new builds can get an insured mortgage amortized over 30 years. The premium rises by 0.20% of the loan.
What is the minimum down payment for a first home?
5% of the first $500,000 and 10% of the rest, for homes under $1,500,000. At $1,500,000 or more, 20%.
What credit score do first-time buyers need?
At least one borrower or guarantor needs a score of 600 or more for an insured mortgage. Lenders can ask for more.
Do condo fees affect the stress test?
Yes. Lenders count 50% of monthly condo fees in your GDS ratio along with the mortgage payment at the qualifying rate, property tax and heating.
Primary sources
- Justice Laws — Insurable Housing Loan Regulations (SOR/2012-282), ss. 5, 6 and 6(3.1) (effective February 27, 2025). Checked .
- OSFI — Minimum qualifying rate for uninsured mortgages (effective January 29, 2026). Checked .
- CMHC — Homeowner mortgage loan insurance: Purchase (eligibility). Checked .
- CMHC — Home Start: 30-year amortization for first-time buyers and new builds. Checked .
- CMHC — Calculating GDS / TDS. Checked .
- CMHC — CMHC reviews underwriting criteria (39% / 44%, 600 credit score restored) (effective July 5, 2021). Checked .
- Department of Finance Canada — Mortgage reforms in force: $1.5M insured price cap, 30-year amortization (effective December 15, 2024). Checked .
- Department of Finance Canada — 2023 Fall Economic Statement, Chapter 1: the Canadian Mortgage Charter (effective November 21, 2023). Checked .
- OSFI — Final revised Guideline B-20 (letter of October 17, 2017) (effective October 17, 2017). Checked .
- Financial Consumer Agency of Canada — Preparing to get a mortgage: how the stress test impacts your qualification (effective October 15, 2025). Checked .
- Bank of Canada — Banking and financial statistics: effective rates on new mortgages. Checked .