How much house can I afford in Canada?
Enter your household income, debts and down payment. We find the highest price where your payments pass the stress test and CMHC’s GDS and TDS limits.
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How affordability is calculated in Canada
Lenders don’t ask what payment feels comfortable. They test two ratios, both at the stress-test rate:
- Gross debt service (GDS): mortgage payment + property tax + heating + half of any condo fees, divided by gross monthly income. CMHC’s limit is 39%.
- Total debt service (TDS): everything in GDS plus all your other debt payments. The limit is 44%.
The calculator raises the price until one of these limits, or the minimum down payment rule, stops it. Your result says which one is holding you back, which tells you what to change: a bigger down payment, fewer debts, or a co-borrower.
Example
A household earning $150,000 with $80,000 saved, no other debts, $5,000 property tax and a 4.49% rate qualifies at 6.49%. Their GDS limit allows about $4,875 a month of housing costs, which supports a home of about $711,000 with an insured mortgage.
What lenders may do differently
Uninsured lenders (20%+ down) can use their own GDS/TDS limits, some count only part of rental or bonus income, and car leases or support payments count as debts. Treat the result as a strong estimate and get pre-approved before you make an offer.
Frequently asked questions
How much income do I need for a $500,000 mortgage?
At a 4.5% rate (6.5% qualifying) over 25 years, the qualifying payment on $500,000 is about $3,350 a month. With $400 a month of property tax and heating, GDS of 39% needs roughly $115,000 of household income, and more if you carry other debts.
Does the stress test use my real rate?
No. It uses the greater of your contract rate plus 2% or 5.25%. Your actual payment still uses your real rate; the stress test only decides how much you can borrow.
Is the down payment counted in affordability?
Yes. Below $1.5 million you need 5% of the first $500,000 and 10% above that, so your savings can cap the price before your income does. The calculator checks both.
Do lenders count rental income?
Many lenders add 50% to 80% of documented rental income, or offset it against the property’s costs. Policies vary, so add only income you can document.
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