Find out how much house you can afford in Canada based on your income, debts, down payment, and the federal mortgage stress test. Includes GDS/TDS debt service ratios.
Combined pre-tax income of all applicants on the mortgage
Cash you have saved for the down payment
Car loans, credit cards, student loans, lines of credit, etc.
Your contract rate — the stress test will add 2% automatically
Capped at 25 years if your down payment is under 20%
Varies by municipality — typically 0.5%–1.5% of home value
Standard lender estimate is typically $100–150/month
Only half of condo fees count toward your debt service ratios
See how affordability changes with different rates
Mortgage Stress TestRate + 2% or 5.25%
Federally regulated lenders must qualify you at the higher of your contract rate +2%, or the benchmark rate of 5.25%.
🍁 This calculator follows the GDS (39%) and TDS (44%) ratio limits used by Canadian federally regulated lenders, combined with the mandatory mortgage stress test.
Maximum Home Price You Can Afford
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🏦 Maximum Mortgage Amount--
💳 Maximum Monthly Housing Payment--
📊 Qualifying (Stress Test) Rate--
💰 Down Payment Used--
Gross Debt Service (GDS) Ratio — Max 39%
0.0%Limit 39%
Total Debt Service (TDS) Ratio — Max 44%
0.0%Limit 44%
Max Home Price
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Current Rate
Max Monthly Payment
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Housing costs only
Limiting Factor
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GDS or TDS ratio
Down Payment %
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of max home price
📊 Detailed Affordability Breakdown
Gross Annual Income
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Gross Monthly Income
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Max Housing Cost (39% GDS)
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Max Housing Cost (44% TDS minus debts)
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Less: Property Tax (monthly)
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Less: Heating Cost
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Less: 50% of Condo Fees
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Max Mortgage Payment Available
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Max Mortgage Amount (at stress rate)
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Plus: Down Payment
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Maximum Home Price
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📈 Rate Scenario Comparison
Scenario
Stress Test Rate
Max Home Price
Max Monthly Payment
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How Home Affordability Is Calculated in Canada
Canadian lenders determine how much mortgage you qualify for using two key ratios — the Gross Debt Service (GDS) ratio and the Total Debt Service (TDS) ratio — combined with the federally mandated mortgage stress test. Whichever ratio produces the lower maximum payment becomes your limiting factor.
All GDS items + car loans, credit cards, student loans, other debts
🧪 The Mortgage Stress Test
Since 2018, all federally regulated lenders must qualify borrowers at the higher of: your contract interest rate plus 2%, or the Bank of Canada's benchmark qualifying rate (currently 5.25%). This means even if your actual mortgage rate is 4.5%, you must prove you could afford payments at 6.5%. The stress test applies whether you're putting down less than 20% (insured) or 20%+ (conventional).
💡 Example: $110,000 Household Income, $65,000 Down Payment
1. Gross Monthly Income: $9,167
2. Max GDS Housing Cost (39%): $3,575
3. Max TDS Housing Cost (44% minus $400 debts): $3,633
4. Lower of the two (GDS is limiting): $3,575
5. Less property tax ($375) and heating ($125): $3,075 available for mortgage payment
6. Stress Test Rate: 7.25% (5.25% rate + 2%)
7. Max Mortgage Amount (25-yr amortization): ~$415,000
8. Plus Down Payment ($65,000): Max Home Price ≈ $480,000
Notice the stress test rate, not your actual contract rate, determines your borrowing limit — this is often the biggest constraint for buyers.
⚠️ Important Notes
— Some credit unions and provincially regulated lenders are not required to apply the federal stress test, though many do so voluntarily.
— Self-employed borrowers may face additional income verification requirements that can affect qualifying income.
— Closing costs (legal fees, land transfer tax, inspection) are separate from your down payment and should be budgeted additionally — typically 1.5%–4% of the purchase price.
— This is an estimate only; lenders consider credit score, employment history, and other factors not captured here.
Frequently Asked Questions
Your affordability is determined by your income, existing debts, down payment, and current interest rates — assessed through the GDS (39% max) and TDS (44% max) ratios used by Canadian lenders. As a rough guideline, your total housing costs shouldn't exceed about 39% of your gross income, with all debts combined staying under 44%.
The stress test requires federally regulated lenders to qualify you at the higher of your contract rate +2% or the benchmark rate of 5.25%. This protects borrowers from overextending themselves if rates rise after closing, but it also reduces the maximum amount most people can borrow compared to using their actual contract rate.
GDS (Gross Debt Service) measures your housing costs — mortgage payment, property tax, heating, and 50% of condo fees — as a percentage of your gross income, capped at 39%. TDS (Total Debt Service) adds all your other debt payments (car loans, credit cards, student loans) on top, capped at 44%. Lenders use whichever ratio produces the lower maximum mortgage amount.
This varies enormously by city, down payment, and debt load. As a very rough rule of thumb, many buyers need a household income that is roughly 8 to 10 times less than the home's purchase price — for example, around $100,000–$130,000 income to comfortably afford a $1,000,000 home with a typical down payment, though this changes significantly with interest rates and personal debts.
Yes, significantly. A larger down payment directly reduces your mortgage principal, which lowers your monthly payment and improves your GDS/TDS ratios — increasing the maximum home price you qualify for dollar-for-dollar. Reaching 20% down also lets you avoid CMHC mortgage default insurance, further reducing your costs.
The stress test is mandatory for all federally regulated lenders (banks, federal credit unions, and CMHC-insured mortgages). Some provincially regulated credit unions and private/alternative lenders are not legally required to apply it, though many still use a similar qualifying buffer for responsible lending. It's worth comparing options if you're close to the affordability threshold.
⚠️ Disclaimer: This calculator provides estimates for informational purposes only, based on standard Canadian GDS/TDS lending ratios and the federal mortgage stress test. Actual approval amounts depend on your credit score, employment history, lender policies, and other factors not captured here. This is not mortgage pre-approval. Consult a licensed mortgage broker or financial institution for a personalized assessment.