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How this income to afford calculator works
This calculator looks to help you understand what it would take to afford a particular home price. This calculator will help you determine how much you need to make to afford home prices of various levels when accounting for additional affordability inputs such as GDS/TDS ratios, mortgage rates, down payment as well as amortization periods.
How much income to afford a home in Toronto?
The average home price in Toronto for April 2025 was $1,107,463 across all home types. How much income would it take to afford the average home in Toronto? Well it would take annual income of $228,325 based on the April 2025 home prices which is $2,687 more compared to the prior month.
This chart breaks down how much income you would need to purchase a home in Toronto:
| Home Type | Home Price | Mortgage | Income Required | Change in Income Required |
|---|---|---|---|---|
| All Home Types | $1,107,463 | $885,970 | $228,325 | +$2,687 (+1.19%) |
| Att/Row/Townhouse | $1,005,487 | $804,390 | $209,042 | +$840 (+0.40%) |
| Condo Apartment | $678,048 | $542,438 | $147,124 | $-751 (-0.51%) |
| Detached | $1,431,495 | $1,145,196 | $289,599 | $-1,470 (-0.50%) |
| Semi-Detached | $1,088,848 | $871,078 | $224,805 | $-4,338 (-1.89%) |
Check out this article to see the income it would take to afford a home around Canada.
These calculations are based on a mortgage rate of 3.84% stress tested at 5.84% over a 25-year amortization preiod. A 20% down payment was used to calculate the mortgage amount. Included in the total home expenses are heating costs of $150 / month and property taxes of $354 / month. A debt-to-income ratio of 32% was used to determine affordability.
If you want to see how much home you could afford based on your current income, check out our mortgage affordability calculator.
How much income do you need to buy a $650,000 house in Canada?
Let’s work through an example of how much income you would have to make to be able to afford a home priced at $650,000 in Canada as this price is close to the national average home price.
For purposes of this calculation we will use the minimum down payment on a $650,000 home, which will then require CMHC insurance since the down payment is less than 20%. We will also use a 5-year fixed mortgage rate of 4.25% which will be stress tested at 6.25% over a 25-year amortization period. For an affordability rule we will use a gross debt service ratio of 32%.
Our first input is the home price which is $650,000. We can use this to determine our minimum down payment which will be 5% on the first $500,000 and 10% on the home price more than $500,000 less than $1,000,000. $500,000 X 5% = $25,000 and $150,000 X 10% = $15,000 for a total minimum down payment of $40,000.
Next we can determine the CMHC insurance that will be required. We will need to determine the LTV ratio to see what premium will be charged which can be calculated by dividing the loan amount needed (home price less down payment) by the total home price. The loan amount needed is $650,000 less $40,000 = $610,000. When we divide this amount by the home price we get a LTV ratio of 93.85%. This means that our premium will be 4% of the loan value. $610,000 X 4% = $24,440.
Our new mortgage amount will be $634,000 which is the home price less down payment in addition to the CMHC insurance cost. We can now calculate our monthly mortgage payment based on this mortgage amount of $634,400 over a 25-year amortization period, at a mortgage rate of 4.25% stress tested at 6.25%. This provides us with a monthly mortgage payment of $4,154.
Since we want a GDS ratio of 32% to consider this home affordable, this means that this monthly mortgage payment of $4,154 will be 32% of monthly household income. This means you will have to make $12,980 a month or $155,763 annually for a $650,000 home in Canada to be considered affordable.