The stress test is the reason the mortgage you were approved for is smaller than the one your payment could comfortably cover. It is also the single most misunderstood rule in Canadian lending. Here is what it is, without the jargon. The rule itself When a lender assesses your application, they do not test whether you can afford the rate you are being offered. They test whether you could afford a higher one. Specifically, you must qualify at the greater of: Your contract rate