Two numbers come out of that exercise and both matter. The stress tested rate decides the maximum mortgage you will be approved for, and CMHC and the other default insurers apply that same tested figure whenever the down payment is under 20 percent. The contract rate decides what leaves your account every month. Canadian fixed rate mortgages compound semi annually rather than monthly, which is why an amortization schedule from an American calculator will not match your Canadian lender's numbers.
Lenders also apply debt service ratios that count more than the mortgage. Property taxes, heating costs and, for a condominium, half the monthly fee all enter the calculation, along with car payments, lines of credit and student debt. That is why two buyers with the same income and the same down payment can be approved for very different amounts.
The practical step is a fully underwritten pre-approval with a rate hold before you look at houses, so the offer you write is one you can complete. Joel Dyck works with buyers who have that in hand, then sets the financing condition period so the lender has time to order an appraisal and confirm the file before conditions come off.