Home Affordability
Calculator Canada
Find out the maximum home price you qualify for using Canada's official GDS and TDS ratios with the mandatory stress test. Enter your income, debts, and down payment for a realistic affordability estimate.
Your financial details
Property & mortgage details
• GDS = (mortgage + tax + heat + 50% condo) ÷ income ≤ 39%
• TDS = GDS + all other debts ÷ income ≤ 44%
• Mortgage payment uses stress test rate (contract + 2% or 5.25%, whichever higher)
• Canadian semi-annual compounding applied throughout
Results are estimates for informational purposes only — not financial advice. Always consult a licensed professional before making decisions. Terms of use →
Understanding mortgage affordability in Canada
Every Canadian applying for a mortgage from a federally regulated lender must pass the OSFI stress test. You must qualify at the higher of: your contract rate + 2%, or 5.25%. At 5.19% contract rate, your qualifying rate is 7.19% — meaning your income must support payments at that higher rate.
GDS (Gross Debt Service) only counts housing costs — mortgage, taxes, heating, and 50% of condo fees. TDS (Total Debt Service) adds all your other debts on top. If your car payment is $600/month, that alone reduces your maximum mortgage by ~$80,000 at typical rates.
Below 20% down: GDS limit is 39%, TDS is 44%, and you pay CMHC insurance (2.8–4% of the mortgage). Above 20%: GDS drops to 35%, TDS to 42%, and no CMHC. The tighter ratios for uninsured mortgages partially offset the lack of CMHC premium.
As of December 15, 2024, the minimum down payment threshold was extended: 5% on the first $500K, 10% on the portion between $500K and $1.5M. Homes over $1.5M still require 20% minimum. This opened the insured mortgage market to more mid-range buyers.
Why the bank's number and your comfortable number differ
A mortgage pre-approval tells you the maximum a lender is willing to give you — not what you can actually afford to pay every month without stress. These are two very different numbers, and confusing them is one of the most common regrets among new homeowners.
GDS and TDS ratios are designed for the bank's risk, not your comfort
Lenders use the Gross Debt Service (GDS) and Total Debt Service (TDS) ratios to determine the maximum mortgage they'll approve — generally capping housing costs at 39% of gross income and total debt at 44%. These thresholds represent the point at which a lender judges default risk to become too high, not the point at which a household feels financially comfortable. Plenty of approved borrowers find that spending close to the maximum ratio leaves little room for savings, vacations, or unexpected expenses.
The stress test adds a buffer you should actually want
Every insured and most uninsured mortgages in Canada must qualify at the higher of the contract rate plus 2%, or 5.25% — the federal stress test rate. This means your approval already accounts for a meaningful rate increase, which is one of the few protections built into the system. It can feel frustrating when it reduces your approved amount, but it exists specifically to prevent the kind of payment shock that caused widespread defaults in other countries during past rate-hiking cycles.
Costs the approval amount doesn't include
Your mortgage approval covers principal, interest, property tax, and heating — but not maintenance, condo fees, higher insurance premiums on a larger home, or the simple fact that a bigger house generally costs more to furnish and maintain. A common rule of thumb is budgeting 1-2% of a home's value annually for maintenance alone, a cost that doesn't show up anywhere in the lender's affordability math.
Affordability FAQs
How much mortgage can I qualify for in Canada?
A general rule of thumb is 3.5–4.5× your gross household income with minimal debt. At $100,000 income with no debt, you can typically qualify for a $350,000–$450,000 mortgage at current rates. However, property taxes, heating costs, condo fees, and existing debt all reduce this. Use this calculator for a precise estimate based on your situation.
Do credit unions use the same stress test?
Federally regulated lenders (Big 6 banks, trust companies) must apply the OSFI stress test. Credit unions are provincially regulated and are technically exempt — but most credit unions conduct their own stress tests voluntarily. Some smaller credit unions may qualify you at your actual contract rate, which can increase your purchasing power.
Can I increase my affordability?
Yes. The main levers are: (1) increase income or add a co-borrower, (2) pay down other debts to improve TDS ratio, (3) increase your down payment, (4) extend amortization to 30 years if eligible, or (5) choose a lower-priced market. Even paying off a $500/month car loan can increase your maximum mortgage by $50,000–$80,000.
Is this the maximum I should borrow?
No — this shows the maximum you can qualify for, not necessarily what you should borrow. Many financial advisors recommend a GDS closer to 25–30% and TDS under 35% for comfortable payments. Just because a lender will give you $600,000 doesn't mean your budget is comfortable at that level. Budget conservatively, especially in a higher-rate environment.