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Canada home affordability calculator
This calculator takes various financial inputs and looks to provide an estimate on how much home you can afford. If you want to see what it would take to afford a home around Canada, check out our article on the income required to afford a home.
What is considered affordable?
You may be asking what would be considered affordable? Taking guidance from the Canada Mortgage and Housing Corporation (CMHC) affordability is calculcated as monthly housing costs not exceeding 32% of your average gross (pre-tax) monthly income. As well as having total debt payments stay below 40% of your pre-tax gross income.
While these ratios are provided as guidance for what is considered affordable. There are limits to these ratios if you look to secure an insured mortgage from CMCH. This means your gross debt service ratio (GDS) should not exceed 39% and your total debt service ratio (TDS) should not exceed 44%.
Knowing your GDS and TDS ratios are an important factor when purchasing a home.