Canada home affordability calculator
This calculator takes various financial inputs — including your income, debts, down payment, mortgage rate, and amortization period — and estimates the maximum home price you can afford based on Canadian lending rules. If you want to see what it would take to afford a home across major Canadian cities, check out our article on the income required to afford a home.
How this mortgage affordability calculator works
Enter your gross household income, monthly debt payments (car loans, credit cards, student loans, etc.), your available down payment, the expected mortgage rate, and your desired amortization period. The calculator applies CMHC debt service ratio limits and the mortgage stress test to determine:
- The maximum home price you can afford
- Your maximum mortgage amount after down payment
- Whether CMHC mortgage insurance is required
- Your estimated monthly mortgage payment
- Your GDS and TDS ratios
What is considered affordable?
Taking guidance from the Canada Mortgage and Housing Corporation (CMHC), affordability is calculated as monthly housing costs not exceeding 32% of your gross (pre-tax) monthly income. Total debt payments should stay below 40% of your pre-tax gross income.
While these ratios are provided as general guidance, there are stricter limits if you want to secure an insured mortgage from CMHC:
| Ratio | What It Measures | CMHC Limit |
|---|---|---|
| GDS (Gross Debt Service) | Housing costs ÷ Gross income | 39% |
| TDS (Total Debt Service) | (Housing costs + all other debts) ÷ Gross income | 44% |
Housing costs include: mortgage payment (principal + interest), property taxes, heating costs, and 50% of condo fees (if applicable).
Other debts include: car loans, credit card minimum payments, student loans, lines of credit, and any other recurring debt obligations.
Understanding the GDS ratio
The Gross Debt Service (GDS) ratio measures what percentage of your gross monthly income goes toward housing costs. Lenders use this to determine whether you can handle the ongoing costs of homeownership.
GDS = (Mortgage Payment + Property Taxes + Heating + 50% Condo Fees) ÷ Gross Monthly Income
For CMHC-insured mortgages, your GDS cannot exceed 39%. Some conventional lenders (for uninsured mortgages with 20%+ down) may allow GDS up to 44% for strong borrowers with high credit scores and significant assets.
GDS calculation example
| Item | Monthly Amount |
|---|---|
| Mortgage payment | $2,100 |
| Property taxes | $350 |
| Heating costs | $150 |
| 50% condo fees | $200 |
| Total housing costs | $2,800 |
| Gross monthly income | $8,333 ($100,000/year) |
| GDS ratio | 33.6% ✓ (under 39%) |
Understanding the TDS ratio
The Total Debt Service (TDS) ratio measures what percentage of your gross income goes toward all debt obligations, including housing.
TDS = (Housing Costs + Car Payment + Credit Card Minimums + Student Loans + Other Debts) ÷ Gross Monthly Income
For CMHC-insured mortgages, your TDS cannot exceed 44%.
TDS calculation example (continuing from above)
| Item | Monthly Amount |
|---|---|
| Total housing costs | $2,800 |
| Car payment | $450 |
| Credit card minimums | $150 |
| Student loan | $200 |
| Total debt payments | $3,600 |
| Gross monthly income | $8,333 |
| TDS ratio | 43.2% ✓ (under 44%) |
Knowing your GDS and TDS ratios is an important factor when purchasing a home. Use the debt service ratio calculator for a detailed breakdown.
The mortgage stress test
Since 2018, all mortgage borrowers in Canada must pass the mortgage stress test. This applies whether your mortgage is insured or uninsured, fixed or variable.
You must qualify at the higher of:
- Your actual contract mortgage rate plus 2%, or
- The Bank of Canada’s minimum qualifying rate (currently 5.25%)
This means even if you secure a 4.5% mortgage rate, you must prove you can afford payments at 6.5%. The stress test significantly reduces the maximum home price you can afford compared to qualifying at the actual rate.
Impact of the stress test on affordability
| Household Income | Max Home Price (at actual rate 4.5%) | Max Home Price (stress tested at 6.5%) | Reduction |
|---|---|---|---|
| $70,000 | $420,000 | $345,000 | −$75,000 |
| $100,000 | $600,000 | $495,000 | −$105,000 |
| $130,000 | $780,000 | $640,000 | −$140,000 |
| $160,000 | $960,000 | $790,000 | −$175,000 |
Assumes 10% down payment, 25-year amortization, no other debts. Figures are approximate.
Use the mortgage stress test calculator to see exactly how the stress test affects your purchasing power.
How much home can you afford by salary?
Here are estimated maximum home prices based on different salary levels, assuming a 10% down payment, 25-year amortization, 4.5% mortgage rate (stress tested), and no other debts:
| Annual Salary | Max Mortgage | Max Home Price | Monthly Payment |
|---|---|---|---|
| $50,000 | $230,000 | $255,000 | $1,270 |
| $70,000 | $325,000 | $360,000 | $1,795 |
| $80,000 | $370,000 | $410,000 | $2,045 |
| $100,000 | $465,000 | $515,000 | $2,570 |
| $120,000 | $555,000 | $615,000 | $3,065 |
| $150,000 | $695,000 | $770,000 | $3,840 |
| $200,000 | $925,000 | $1,030,000 | $5,110 |
Figures are estimates based on CMHC GDS/TDS limits and the stress test. Actual amounts depend on property taxes, heating costs, condo fees, and credit profile.
We will use monthly mortgage payments to illustrate more detailed examples below.
How much home can you afford with a salary of $70,000 a year?
If you make $70,000 a year you may be able to afford a $345,000 mortgage. However, many factors impact home affordability: mortgage rates, down payment, CMHC insurance, amortization period, and your debt-to-service ratio.
At a salary of $70,000 your gross monthly income would be $5,833. Since the CMHC has a limit of 39% as a gross debt service ratio, this means your maximum monthly housing cost is $2,275.
A mortgage of $345,000 over a 25-year amortization period at a mortgage rate of 4.00% (stress tested at 6.00%) will produce the maximum payment of $2,275. Since this assumes a mortgage down payment of $50,000, this mortgage payment includes the cost of CMHC mortgage default insurance of $9,685.
How much home can you afford with a salary of $100,000 a year?
At $100,000 per year, your gross monthly income is $8,333. With the 39% GDS limit, your maximum housing costs are $3,250 per month. Assuming a 10% down payment, 25-year amortization, and 4.5% mortgage rate (stress tested at 6.5%), you could afford a home priced at approximately $515,000 with a mortgage of about $465,000.
Keep in mind that existing debts (car loan, credit card payments) reduce this amount through the TDS ratio. Every $500/month in existing debt payments reduces your purchasing power by approximately $80,000–$100,000.
Down payment and CMHC insurance
Your down payment size directly affects both affordability and costs:
| Home Price | Minimum Down Payment | Down Payment % | CMHC Insurance Required? |
|---|---|---|---|
| Up to $500,000 | 5% of purchase price | 5% | Yes |
| $500,000–$999,999 | 5% on first $500K + 10% on remainder | 5–10% | Yes |
| $1,000,000+ | 20% minimum | 20%+ | No |
When your down payment is less than 20%, CMHC mortgage default insurance is required. The premium ranges from 2.80% to 4.00% of the mortgage amount and is typically added to your mortgage balance:
| Down Payment | CMHC Premium |
|---|---|
| 5% – 9.99% | 4.00% |
| 10% – 14.99% | 3.10% |
| 15% – 19.99% | 2.80% |
| 20%+ | Not required |
A larger down payment reduces your mortgage amount, lowers monthly payments, and may eliminate insurance costs — all of which increase the home price you can afford. Use the mortgage down payment calculator for a detailed analysis.
Other costs that affect affordability
The mortgage payment is only part of the cost of homeownership. When budgeting, consider:
- Property taxes — Vary by municipality. Typically 0.5% to 1.5% of the home’s assessed value annually. A $500,000 home in Toronto pays roughly $3,000/year; the same home in Montréal might pay $4,500/year.
- Home insurance — Required by lenders. Typically $1,000 to $2,500/year depending on coverage and location.
- Heating and utilities — Budget $150 to $350/month depending on home size and climate.
- Condo fees — If buying a condo, monthly fees can range from $200 to $800+. Lenders include 50% of condo fees in the GDS calculation.
- Closing costs — Budget 1.5% to 4% of the home price for land transfer tax, legal fees, home inspection, title insurance, and other transaction costs.
- Maintenance — Budget approximately 1% of the home’s value annually for ongoing repairs and maintenance.
Tips to increase your home affordability
- Pay down existing debts — Reducing car loans or credit card balances improves your TDS ratio and increases purchasing power.
- Save a larger down payment — Reaching 20% eliminates CMHC insurance and qualifies you for a longer 30-year amortization.
- Extend your amortization — Going from 25 to 30 years (with 20%+ down) lowers monthly payments, increasing affordability at the cost of more total interest.
- Improve your credit score — A higher score can qualify you for better mortgage rates, reducing your payment and improving affordability.
- Shop for the best rate — Even a 0.25% difference in mortgage rates can change your purchasing power by $15,000–$25,000.
- Consider a co-applicant — Adding a spouse or co-buyer’s income increases gross household income and purchasing power.
- Look beyond major cities — Explore more affordable markets where your budget stretches further.
Related calculators
- Mortgage Calculator — Calculate your monthly mortgage payment
- Mortgage Down Payment Calculator — Determine your minimum down payment
- Mortgage Insurance Calculator — Estimate your CMHC insurance premium
- Mortgage Stress Test Calculator — See how the stress test affects your purchasing power
- Debt Service Ratio Calculator — Calculate your GDS and TDS ratios
- Closing Costs Calculator — Estimate total transaction costs
- Income to Afford a Home — See what income is needed across Canadian cities
- Land Transfer Tax Calculator — Calculate your provincial land transfer tax