Mortgage affordability calculator
Estimate your maximum home price from your income, debts and down payment, with the mortgage stress test built in.
How much mortgage can I afford?
Your maximum mortgage comes down to four things: your gross income, the debts you already carry, your down payment and the rate you have to qualify at under the stress test. Put your figures into the calculator below for an estimate, then read on to see how lenders actually run these numbers.
- Lenders cap housing costs at 39% of gross income (GDS) and total debt at 44% (TDS)
- You must qualify at the greater of your contract rate + 2% or 5.25% (the stress test)
- A bigger down payment and lower other debts both raise your maximum affordable price
- Your true comfortable budget may be lower than your maximum approval
Annual Incomes
Monthly Expenses
Mortgage Info
Additional Housing Costs
What Can I Afford?
Based on the information you provided, a house at this price should fit within your budget.
$327,654
Max. Home Price
$2,220
Total Monthly Expenses
Monthly Mortgage
$1,820
Interest Rate
5%
Loan Amount
$311,271
Amortization Period
25 Years
Payment Frequency
Monthly
No. of Payments
300
Estimated Monthly Expenses
Results are estimates based on the stress test qualifying rate of 7%.
How lenders calculate affordability
Two ratios control your maximum mortgage size in Canada:
GDS (Gross Debt Service) ≤ 39%
(Mortgage payment + property tax + heating + 50% of condo fees) ÷ gross income
TDS (Total Debt Service) ≤ 44%
(All GDS costs + car loans, credit cards, and other debt payments) ÷ gross income
On top of those ratios sits the stress test. You qualify at the greater of your contract rate plus 2% or 5.25%. That buffer rate, not the rate you'll actually pay, sets your maximum loan size. It's why an approval usually comes in lower than a simple payment calculation suggests.
Worked example (illustrative)
Take a household earning $120,000 a year ($10,000 a month), with a $400 monthly car payment and no other debt. They're putting 10% down on a 25-year amortization. For illustration we'll assume $350 a month in property tax, $100 for heating and an example contract rate of 5.25%, so the stress test applies at 7.25%. These are assumptions, not a rate quote.
Here GDS is the tighter limit, so it sets the ceiling. Add a second car loan or a $10,000 credit card balance and TDS takes over, and the number drops. At the example contract rate of 5.25%, the actual payment on that loan would be about $2,872 a month, well under the $3,450 they qualified at. That gap is the stress-test buffer.
Common mistakes to avoid
- Using today's contract rate instead of the higher stress-test rate to estimate affordability
- Forgetting property tax and heating costs, which count toward GDS even though they aren't part of the mortgage payment
- Ignoring existing debts like car loans or student loans that reduce your TDS room
- Treating a pre-qualification as an approval before a lender has reviewed your credit and documents
- Borrowing right up to your maximum approval instead of leaving a comfortable buffer for renewal-time rate increases
If debt is what's holding you back
Plenty of people run this calculator and find the car loan and credit cards cost them more borrowing room than they expected. If you already own, that's often a reason to look at rolling high-interest debt into your mortgage before you move up. The debt consolidation calculator shows what your monthly outflow looks like afterwards, and our guide to how refinancing works in Canada covers the 80% loan-to-value limit and the penalty to break your current term.
Buying for the first time? Once you know your budget, use the monthly payment calculator to see costs at that price, check land transfer tax for your province, and read about programs for first-time home buyers that can stretch your down payment further.
Frequently asked questions
How much mortgage can I afford in Canada?
Most lenders cap your housing costs with two ratios: GDS (gross debt service) at 39% and TDS (total debt service) at 44% of gross household income, tested at the stress-test rate. Your maximum mortgage is the largest amount where the payment, property tax, heating and your other debts still fit inside those limits.
What are GDS and TDS ratios?
GDS is the share of your gross income going to housing: mortgage payment, property tax, heating and half of any condo fees. TDS adds every other debt payment, such as car loans, credit cards and lines of credit. Most lenders want GDS at or below 39% and TDS at or below 44%.
What is the mortgage stress test and how does it affect affordability?
The stress test means you qualify at the greater of your contract rate plus 2% or 5.25%. Your maximum mortgage is worked out at that higher rate, not the rate you'll actually pay, which trims the approved amount as a buffer against rates rising at renewal.
Does my down payment affect how much I can afford?
Yes, in two ways. A bigger down payment reduces the loan your payment is calculated on, and at 20% down there's no default insurance premium added to the balance, which leaves more room inside your GDS and TDS limits on the same income. Homes priced at $1.5M or more need 20% down regardless.
Do my other debts really reduce how much house I can buy?
Yes. TDS caps all debt payments combined, so a $600 monthly car payment or a large credit card balance lowers the mortgage payment you can qualify for, even if your income alone would support more under GDS.
Is the amount a calculator shows the same as what a lender will approve?
No. It's a close estimate. Lenders also weigh your credit, employment history, the property and their own policies, so the amount a lender actually approves can differ from what any online calculator shows.
Should I borrow the maximum amount a lender approves?
Not necessarily. A lender works out the most you can qualify for, not what's comfortable alongside your other goals. Many buyers borrow less than the maximum to keep a cash cushion for repairs, emergencies and a higher rate at renewal.
Ready to find out what you can actually borrow?
Free to apply, no obligation. An agent reviews your income, debts and down payment and walks you through the lender options.
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