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Mortgage Affordability Calculator (Canada)
Before you shop for a home, find out what a lender would actually let you borrow. Canadian lenders don't qualify you at the rate you'll pay — they test you at the higher of your contract rate plus 2% or 5.25%, and they cap your housing costs and your total debts as a share of your gross income. This calculator runs those same tests and works backwards to the highest home price that passes them.
Your income and debts
What you can afford
| Qualifying (stress-test) rateContract rate 4.50% + 2% — above the 5.25% floor | 6.50% |
| Gross monthly income | $10,000.00 |
| Maximum monthly housing costGDS limit: 39% of gross monthly income — the limiting ratio | $3,900.00 |
| Maximum monthly debt serviceTDS limit: 44% of gross monthly income | $4,400.00 |
| Mortgage payment at the stress-test rateThe largest payment the ratios allow, at the qualifying rate | $3,350.00 |
| Property taxPer month | $400.00 |
| HeatingPer month | $150.00 |
| Maximum mortgageBefore mortgage default insurance | $480,895.71 |
| Mortgage default insurance4.00% of the mortgage — added to the amount borrowed | $19,235.83 |
| Total mortgage borrowed | $500,131.54 |
| Down payment9.4% of the maximum home price | $50,000.00 |
| Maximum home priceMaximum mortgage + down payment | $530,895.71 |
This is an estimate, not a pre-approval. Lenders also check your credit score, income history, and the specific home — and uninsured limits vary by lender. Closing costs (roughly 1.5–4% of the price) are not included. Found a home? Work out the payment on it with the Canada Mortgage Calculator.
How the math works
First, the qualifying rate: under OSFI's Guideline B-20, a federally regulated lender must test an uninsured mortgage at the higher of the contract rate plus 2% or 5.25% — the minimum qualifying rate, confirmed unchanged in January 2026. Insured mortgages are tested on the same basis under federal rules. The 5.25% floor only binds when the contract rate is below 3.25%.
Next, the two debt-service ratios. Gross Debt Service (GDS) is your housing costs — the mortgage payment at the qualifying rate, property tax, heating, and half of any condo fees — as a share of gross income. Total Debt Service (TDS) adds every other debt payment on top. CMHC caps insured mortgages at a GDS of 39% and a TDS of 44%; uninsured mortgages use each lender's own limits, and this calculator uses 32% and 40%, a commonly used standard.
Then the calculator works backwards. The largest stress-test payment is the smaller of the two budgets: the GDS budget minus property tax and heating, or the TDS budget minus property tax, heating, and debts. That payment is converted into a mortgage using the Canadian semi-annual compounding payment factor, and the down payment is added to get the maximum price. When the mortgage is insured, the CMHC premium is added to the mortgage — 2.80% of the mortgage with 15–19.99% down, 3.10% with 10–14.99% down, 4.00% with 5–9.99% down — so the loan is slightly smaller than the payment alone would suggest, and the calculator iterates until the premium tier and the price agree.
Worked example (in CAD)
A household earning $120,000 a year ($10,000 a month) with $400 a month in debt payments, a $50,000 down payment, a 4.50% contract rate, a 25-year amortization, $4,800 a year in property tax, and $150 a month in heating:
Qualifying rate: higher of 4.50% + 2% = 6.50% or the 5.25% floor = 6.50%
Monthly rate: (1 + 0.065 ÷ 2)1/6 − 1 = 0.53447%
GDS budget: 39% × $10,000 = $3,900 a month. TDS budget: 44% × $10,000 = $4,400 a month.
Largest stress-test payment: GDS allows $3,900 − $400 tax − $150 heating = $3,350; TDS allows $4,400 − $400 − $150 − $400 debts = $3,450. GDS is the tighter limit, so the largest payment is $3,350 a month.
That payment at 6.50% over 25 years supports a mortgage of $480,895.71. The down payment is 9.4% of the resulting price, so a 4.00% insurance premium of $19,235.83 is added, for a total mortgage of $500,131.54 — and a maximum home price of $530,895.71.
At the contract rate of 4.50%, the actual monthly payment on that mortgage would be $2,768.09 — $581.91 less than the stress-test payment. The minimum down payment for a home at this price is $28,089.57, so the $50,000 down payment clears it.
Common gotchas
- The stress test, not your rate, sets the ceiling. Qualifying at 6.50% instead of 4.50% takes about $101,000 off the maximum price in the worked example above — a 16% cut. That gap is the whole point of the test: it checks you could still carry the mortgage if rates rose. Shopping with the contract rate in mind will have you looking at homes you can't be approved for.
- Debts count more than you think. Lenders count 3% of credit card and line-of-credit balances as a monthly payment even if you pay them off in full, and a car lease counts in full. Paying off a $400-a-month loan before applying would add roughly $57,000 to the maximum price in the worked example — sometimes the fastest way to afford more house is to owe less elsewhere.
- Property tax and heating are estimates. The lender uses the actual tax bill and heating cost for the home you buy, and both vary a lot by city and by house. A home with $600 a month in property tax instead of $400 would cut the maximum price by roughly $29,000 in the worked example — so check the listing's tax figure before falling for a house.
- The down payment has a floor and a ceiling. The minimum is 5% of the first $500,000 of the price plus 10% of the portion above that, and homes priced above $1.5 million can't be insured at all — they need 20% down. A bigger down payment raises the ceiling twice: it adds directly to the price, and it can drop the insurance premium into a cheaper tier.
- A 30-year amortization isn't open to everyone. For insured mortgages it's generally limited to first-time buyers and buyers of newly built homes; most other borrowers are capped at 25 years. Uninsured mortgages follow the lender's own rules. A longer amortization raises the amount you can borrow, but it also means paying much more interest over the life of the loan.
- This is a ceiling, not a pre-approval. Lenders also check your credit score (CMHC generally wants 600 or higher for an insured mortgage), your income history, and the property itself — and uninsured limits vary by lender, so your bank's answer may differ from this page. The ratios are maximums, too: a payment at the top of the range can still feel tight month to month.
Frequently asked questions
What is the mortgage stress test?
A qualifying rule set by OSFI under Guideline B-20. Federally regulated lenders must check you can afford your mortgage at the higher of your contract rate plus 2% or 5.25% — the minimum qualifying rate, confirmed unchanged in January 2026. The same test applies to insured mortgages under federal rules. It doesn't change what you pay; it limits what you can borrow.
What are GDS and TDS?
Gross Debt Service is your housing costs — mortgage payment, property tax, heating, and half of any condo fees — as a share of your gross income. Total Debt Service adds all your other debt payments. CMHC caps insured mortgages at a GDS of 39% and a TDS of 44%. Uninsured mortgages use each lender's own limits; this calculator uses 32% and 40%, a commonly used standard.
How much down payment do I need in Canada?
At least 5% of the first $500,000 of the price, plus 10% of the portion above $500,000. With less than 20% down the mortgage must be insured, which adds a premium of 2.80–4.00% of the mortgage to the amount borrowed. Homes priced above $1.5 million can't be insured and need 20% down.
Does the stress test change my monthly payment?
No. You pay the contract rate you negotiate — in the worked example on this page, $2,768.09 a month at 4.50%. The stress-test payment of $3,350 is only the figure the lender uses to decide how much you can borrow. The gap between the two is the cushion the test is designed to create.