🏡 Mortgage Qualifying

How Much Mortgage Can I Afford?

Canada's mortgage qualifying rules use your income, debts, and the stress test to determine the maximum home price you can buy. See exactly where you stand.

How Canadian mortgage affordability is calculated

Canadian lenders use two debt ratios to figure out the maximum mortgage you qualify for. Both are calculated at a stress test rate — your actual rate plus 2%, or 5.25%, whichever is higher. You need to pass both tests.

🏠 GDS — Gross Debt Service Max 39%

Covers your housing costs only — mortgage payment, property tax, heat, and 50% of condo fees. This total can't exceed 39% of your gross monthly income.

💳 TDS — Total Debt Service Max 44%

Everything in GDS, plus all other debts — car loans, credit cards, student loans, and any other monthly obligations. This total can't exceed 44% of your gross monthly income.

Whichever ratio hits its ceiling first determines your maximum mortgage. Enter your numbers below to see exactly where you stand.

Household Income
Annual Income (before tax)
Total gross household income — include all applicants. Salary, self-employment, rental, etc.
$120,000
$
Down Payment & Mortgage
Down Payment
Your available down payment. Under 20% means CMHC insurance is required and added to the mortgage.
$80,000
$
Mortgage Rate
Your expected mortgage interest rate. The stress test qualifying rate will be calculated automatically.
5.50%
Amortization Period
25 yrs
Monthly Housing Costs
Property Tax (monthly)
Estimated monthly property tax. A common estimate is 1% of home value per year ÷ 12.
$400
$
Heat / Utilities (monthly)
Lenders typically use $100–$175/month for heat. Enter your estimate.
$150
$
Condo / Strata Fees (monthly)
50% of condo fees are included in the GDS ratio. Enter 0 if buying a house.
$0
$
Other Monthly Debt Payments
Car Loan / Lease
Monthly car loan or lease payments. Included in TDS ratio.
$0
$
Credit Cards / Lines of Credit
Lenders use 3% of your total credit card balances as a monthly obligation.
$0
$
Other Debt Payments
Student loans, personal loans, support payments, etc.
$0
$
Maximum Home Price
$0
Based on stress test qualifying rate
Maximum Mortgage $0
Down Payment $0
CMHC Premium None
Est. Monthly Payment
Your actual monthly payment at your mortgage rate — what you'll really pay each month.
 $0/mo
Stress Test Rate
The rate used to qualify you — your rate +2% or 5.25%, whichever is higher. You must qualify at this higher rate, but won't actually pay it.
 –
GDS Ratio 0%
Gross Debt Service — max 39%  ·  (Mortgage + tax + heat + 50% condo) ÷ gross income
TDS Ratio 0%
Total Debt Service — max 44%  ·  (Housing costs + all other debts) ÷ gross income
Monthly Cost Breakdown (at actual rate)
Mortgage Payment$0
Property Tax$0
Heat$0
Condo Fees (50%)$0
Total Housing Costs$0
Qualifying payment at stress test rate: $0/mo

📊 GDS vs TDS

GDS covers just your housing costs — mortgage, tax, heat, half of condo fees. TDS adds all your other debts on top. Lenders use whichever ratio hits its limit first to cap your mortgage.

🧪 The Stress Test

You must qualify at your rate +2% or 5.25%, whichever is higher. If your rate is 5.5%, you qualify at 7.5%. This can reduce your maximum mortgage by 15–20% compared to qualifying at your actual rate.

💡 Boost Your Approval

Paying off a car loan before applying can meaningfully increase your TDS ratio room. Every $500/month in debt payments you eliminate can add $80,000–$100,000 to your maximum mortgage.

🏦 Get Pre-Approved

This calculator gives you a strong estimate, but lenders also factor in credit score, employment stability, and income verification. A pre-approval locks in a rate and confirms your actual limit.

Know your max — now calculate your payment
Use the mortgage payment calculator to see your exact payment, total interest, and amortization schedule.
→ Payment Calculator
Year-by-Year Amortization
Based on your maximum mortgage at your actual rate
PERIOD PAYMENT PRINCIPAL INTEREST BALANCE
Adjust the inputs above to generate your schedule.

Frequently asked questions

With no other debts and a 10% down payment, most lenders will approve a purchase price of approximately $490,000–$510,000. Existing debts (car loans, student loans) reduce this significantly. Use the calculator above for a precise number based on your situation.

The Gross Debt Service (GDS) ratio is the percentage of your gross monthly income going toward housing costs — mortgage payments, property taxes, heat, and 50% of condo fees. Canadian lenders require GDS to be 39% or less. This is the primary test that determines how much mortgage you qualify for.

The Total Debt Service (TDS) ratio adds all other monthly debts (car payments, student loans, credit card minimums) to your housing costs. Lenders require TDS to be 44% or less. A $500/month car payment reduces your maximum purchase price by roughly $75,000.

For a $700,000 home: 5% on the first $500,000 = $25,000, plus 10% on the remaining $200,000 = $20,000. Total minimum: $45,000 (6.4% of purchase price). CMHC insurance applies and is added to the mortgage amount.

Yes — significantly. The stress test requires qualifying at your contract rate + 2% (minimum 5.25%). This typically reduces your maximum mortgage by 15–20% compared to qualifying at the actual contract rate. It's the single biggest factor limiting affordability for many Canadian buyers.

  • Pay down debts: A $400/month car payment reduces your purchase price by ~$60,000
  • Larger down payment: Every extra $10K increases your purchase price by $10K
  • Home Buyers' Plan (HBP): Withdraw up to $35,000 from your RRSP tax-free toward your down payment
  • Add a co-borrower: A spouse or partner's income is added for qualification purposes