Canadian Mortgage Affordability Calculator

What the mortgage affordability calculator does

The calculator estimates the largest home price and mortgage you can realistically be approved for, from your income, debts, down payment and the rules Canadian lenders apply. Because it uses both debt service ratios and the stress test, it is closer to what a lender will approve than a simple multiple of income.

The two debt service ratios

• Gross debt service (GDS) compares housing costs with income: the mortgage payment, property tax, heating and half of any condo fees.
• Total debt service (TDS) adds all other debt payments, such as car loans, lines of credit and credit card minimums.

Each has a maximum. The calculator applies both and uses whichever gives the lower payment limit.

The mortgage stress test

You must qualify at the greater of your contract rate plus a buffer or a minimum floor rate. The qualifying payment is therefore calculated at a rate above what you will actually pay, so the approved mortgage is smaller. The buffer, floor and both ratio caps are maintained parameters.

How the maximum mortgage is found

• Income is converted to a monthly figure.
• The GDS and TDS payment ceilings are set and property tax and heating subtracted.
• The lower ceiling becomes the maximum mortgage payment.
• That payment is converted into a mortgage at the qualifying rate, with semi-annual compounding.
• The down payment is added for the maximum home price.

A worked example

A household earns $120,000 a year, has $500 of other monthly debt and a $100,000 down payment, and expects a 5% rate over 25 years. The stress test raises the qualifying rate to 7%. Monthly income is $10,000, so the GDS ceiling is $3,900; after $300 of property tax and $100 of heating, the mortgage payment can be $3,500. At 7% that supports a mortgage of about $499,700 and a home price of about $599,700. At the 5% contract rate the same payment would support a larger loan, but you must qualify at 7%.

In this example both ratios bind at the same point: TDS allows $4,400 of payments, less the $500 of debt, also $3,900 for housing. If the household cleared its $500 of debt, TDS would gain room but GDS would still cap housing at $3,900, so the maximum mortgage would not change. Clearing debt helps only when TDS is the tighter limit; otherwise a larger down payment or lower rate does more.

Why the numbers move

• Clearing debts frees TDS room and can raise your maximum.
• A larger down payment adds directly to the home price you can reach.
• Higher property tax or heating costs reduce the mortgage you can carry.
• A higher contract rate raises the qualifying rate and reduces borrowing power.

Provincial differences

The ratios and stress test are national, but the costs that feed them are local. Property tax is set by each municipality, so the same price carries a very different tax bill from city to city, and heating costs vary with climate and fuel. Closing costs differ too: Ontario and British Columbia levy land transfer tax, Toronto adds its own, and Alberta and Saskatchewan charge only small registration fees. Those do not change the ratios, but they reduce the cash left for a down payment.

Common mistakes and planning tips

• Entering take-home pay instead of gross household income.
• Leaving out condo fees, half of which count in GDS.
• Guessing property tax low, which inflates the result.
• Treating the number as a pre-approval.

Run the calculator at today’s rate and again a point higher to see how a renewal could stretch your budget.

Reading the results

The maximum home price is what you can shop up to, the maximum mortgage what a lender would advance, and the maximum monthly payment the ceiling your budget must stay under. The GDS and TDS ratios show how much headroom is left; a ratio pressed against its cap is your binding limit and shows which lever will move the result.

Assumptions and limits

This is a planning estimate. A lender will also weigh your credit history, employment and the property. Property tax and heating are the only extra housing costs unless you enter condo fees, and mortgage default insurance premiums are not included. For a firm pre-approval, speak with a lender or licensed mortgage professional.

This article is general information only and is not financial advice.

About This Canada Mortgage Affordability Calculator

Use this canada mortgage affordability calculator to get an instant, accurate estimate. The figures follow official CMHC guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.