How to use the Mortgage Affordability Calculator
- 1 Enter gross household income.
- 2 Enter monthly debt payments.
- 3 Enter your down payment, rate and amortization.
- 4 Enter property tax and heating, then read your maximum price.
Worked example
A household earning $150,000 with $600 of monthly debts, a $100,000 down payment and a 4.2% rate over 25 years. Stress-tested at 6.2%, the maximum mortgage payment is $4,380 a month, so the mortgage could be about $672,000 and the home price about $772,000. At 4.2%, the real payment would be about $3,608 a month.
Features
Stress test
Qualifies at the higher of your rate plus 2% or 5.25%.
GDS and TDS
Housing costs up to 39% and total debt up to 44% of income.
Minimum down payment
5% on the first $500,000, 10% up to $1.5 million and 20% above.
When to use it
House hunting
Know your budget before viewings.
Saving a down payment
See how more savings raises your price.
Paying off debt
See how clearing a car loan helps.
First-time buyers
Compare 25 and 30-year amortizations.
Frequently asked questions
What is the mortgage stress test?
Lenders check you could afford payments at the higher of your rate plus 2% or 5.25%.
What are GDS and TDS?
Gross debt service is housing costs as a share of income, usually up to 39%. Total debt service adds other debts, usually up to 44%.
What is the minimum down payment?
5% of the first $500,000, 10% of the part up to $1.5 million, and 20% for homes over $1.5 million.
Can I get a 30-year amortization?
First-time buyers and buyers of new builds can get 30-year insured mortgages.
Does a 20% down payment avoid insurance?
Yes. With 20% or more, CMHC insurance is not required.
Do I need to be stress tested to switch lenders?
Not for a straight switch at renewal of an uninsured mortgage.
Is this my pre-approval?
No. Lenders also check credit, employment, savings and closing costs.
What costs count in GDS?
Your mortgage payment, property tax, heating and half of any condo fees.
What about closing costs?
Budget 1.5% to 4% of the price for land transfer tax, legal fees, inspections and moving.
Does my credit score matter?
Yes. Lenders usually want a score of at least 600 to 680 for insured mortgages, and better scores get better rates.
Should I borrow the maximum?
Not always. Leaving room in your budget helps with repairs, rate increases at renewal and savings goals.
Is a co-signer helpful?
A co-signer's income can help you qualify, but they become responsible for the debt.
How do condo fees affect affordability?
Half of monthly condo fees count in GDS, so high fees reduce the price you can afford.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated