Mortgage Affordability Calculator

How to use the mortgage affordability calculator

1. Enter your Gross household income (per year): the total before tax of everyone who will be on the mortgage.
2. Enter your Other debt payments (per month): car loans, student loans, support payments, and about 3% of your credit card and line of credit balances.
3. Enter the Down payment available in dollars.
4. Type the Contract interest rate (%) you expect to get, for example 4.5, and choose the Amortization period.
5. Add the Property taxes (per year), Heating (per month) and, for a condo, the Condo fees (per month).
6. Tick First-time buyer or newly built home if it applies: it allows a 30-year amortization when the mortgage is insured.
7. If a lender uses other limits, open Debt service ratio limits and change the Maximum GDS ratio (%) and Maximum TDS ratio (%).

The results update as you type: the Maximum purchase price, the Mortgage (incl. insurance), your Down payment as a percentage, the CMHC insurance premium, the Qualifying rate (stress test), the Payment at the qualifying rate, the Payment at your rate, the Monthly housing cost at your rate, and your GDS ratio and TDS ratio. A message tells you what limits the price: your income, your down payment or the amortization rule. How it was calculated shows every step.

How lenders decide how much you can borrow

Canadian lenders use two debt service ratios. The gross debt service (GDS) ratio is the share of your gross monthly income that goes to housing: principal and interest, property taxes, heating, and 50% of condo fees. The total debt service (TDS) ratio adds all your other debt payments. CMHC caps them at 39% (GDS) and 44% (TDS) for insured mortgages, and this tool uses those limits by default.

Both ratios are calculated with the minimum qualifying rate, the “stress test”: the greater of your contract rate plus 2% or 5.25%. It applies to insured mortgages (Department of Finance Canada rule, in force since June 1, 2021) and to uninsured mortgages at federally regulated lenders (OSFI Guideline B-20). The rule was checked on the OSFI and CMHC websites in September 2026.

The formulas

With a monthly income I, housing costs H = taxes / 12 + heating + 50% of condo fees, and other debts D:

• maximum payment = min(39% × I − H, 44% × I − H − D)
• maximum mortgage M = payment × (1 − (1 + i)^−n) / i, where i = (1 + q/2)^(1/6) − 1 is the monthly rate for a qualifying rate q compounded semi-annually (the Canadian fixed-rate convention), and n = amortization × 12.

The tool then searches for the highest whole-dollar price that meets every rule: the minimum down payment (5% of the first $500,000, 10% of the part up to $1.5 million, 20% above), the CMHC premium added to the loan when you put down less than 20% (2.80% to 4.00%, plus 0.20% over 25 years), and a mortgage no larger than M. These down payment and premium rules are the same as in the Canadian mortgage calculator.

Example with the default values: $120,000 of income, $400 of debts, $60,000 down, 4.5% over 25 years, $4,000 of taxes and $100 of heating. The qualifying rate is 6.5% and GDS is the limit: $3,900 − $433.33 leaves $3,466.66 a month, which supports a $517,548 mortgage. The maximum price is about $561,986, with a 3.10% premium and a payment of about $2,864 at 4.5%.