How does the OSFI stress test affect my pre-approval at renewal?

Direct answer

Effective November 21, 2024, OSFI removed the stress test for mortgage RENEWALS where the borrower switches lenders without increasing the principal balance. The change ended what regulators called "renewal entrapment" — the situation where existing borrowers with otherwise-affordable mortgages were locked into renewing with their current lender because they couldn't pass the stress test at a different lender's contract rate. As of late 2024 a borrower can: (1) renew with the EXISTING lender at any negotiated rate (no stress test, never has been); (2) SWITCH to a new federally regulated lender at renewal at the new lender's contract rate WITHOUT the stress test, provided the principal is not increased and no new advances of credit are taken. Where the borrower wants to ADD to the principal (a refinance, an equity take-out, a HELOC top-up), the stress test STILL applies at the higher of contract rate + 2% or 5.25%. For BC borrowers facing 2026/2027 renewals at materially higher rates than their 2021 contract rates: shopping a switch at renewal is now genuinely possible without artificial qualification ceilings. Practitioner truth: get rate quotes from at least three lenders 4-6 months before maturity; the best switch rate often comes from a monoline lender, not the Big Six.