Mortgage affordability calculator

How Canadian mortgage affordability is calculated

Federally regulated lenders qualify borrowers at the higher of the contract rate plus 2% or 5.25% — the federal “stress test” qualifying rate set by OSFI under Guideline B-20. The calculator finds the maximum mortgage that keeps two ratios within caps:

• GDS (Gross Debt Service): mortgage payment + property tax + heat + 50% of condo fees, divided by gross household income. Cap: 39% (insured); some lenders push to 35% in tight files.
• TDS (Total Debt Service): GDS components + all other monthly debt obligations. Cap: 44% (insured).

Your maximum qualifying mortgage is whichever bracket binds first — usually TDS for people with car loans / student debt; usually GDS for debt-free buyers in high-tax markets.

Why the stress test exists

Introduced in 2018, the stress test requires you to prove you can carry the mortgage at a rate 2 percentage points above your contract rate. If contract rates are at 4.84%, you must qualify at 6.84%. If they're at 3.0%, you must qualify at 5.25% (the floor).

The point: protect you from payment shock at renewal (typically 5 years later) if rates have risen. The trade-off: you qualify for noticeably less house than your contract-rate payment would suggest you can afford.

What changes your affordability the most

• Down payment size: Larger down → smaller mortgage → lower payment → higher affordability ceiling. Crossing 20% also eliminates CMHC and unlocks the uninsured GDS/TDS caps (which some lenders price differently).
• Other monthly debts: Every $300/month of additional debt costs you about $50,000 of qualifying mortgage. Pay down car loans before applying.
• Property tax: A $700k home in Winnipeg (~$8,700/yr tax) qualifies for a smaller mortgage than the same home in Vancouver (~$2,100/yr).
• Credit score: Lenders give better rates and slightly looser overlays to 720+ scores. Below 680 lands you with B-lenders who price ~1% higher.
• Income type: Salaried with 2-year tenure is easiest. Self-employed (BFS), commission, contract, and rental income all require additional documentation and sometimes haircuts.

Insured vs uninsured math

• Insured (down payment under 20%): CMHC/Sagen/Canada Guaranty premium added to mortgage balance. GDS 39% / TDS 44%. Mortgage stress-tested.
• Uninsured / conventional (down payment 20%+): No CMHC. GDS 39% / TDS 44% federally; some lenders use 35% / 42%. Still stress-tested if mortgage is from a federally regulated lender.
• Provincial / credit union: BC, ON, AB credit unions are provincially regulated and can choose to skip the stress test — sometimes the difference between getting in vs being shut out.

How the bottleneck moves things

The calculator highlights whether GDS or TDS is binding. If GDS is binding, you have room to take on a bit more non-mortgage debt without affecting qualifying. If TDS is binding, paying down debt before applying meaningfully lifts your ceiling.

What this calculator doesn't cover

• Lender overlays — credit score thresholds, employment-tenure rules, BFS documentation requirements
• CMHC insurance premium impact on insured deals — see default insurance
• Provincial closing costs — LTT, PST on CMHC, legal fees
• Rental income offset for income properties — most lenders use 50–80% of gross rents
• Co-signer income stacking — see co-signer impact

Worked example

$140k household income, $450/month other debts, $80k down, 4.84% contract, 25-year amort, Ontario property tax ~$5,400, heat $1,500:

• Qualifying rate: max(4.84 + 2, 5.25) = 6.84%
• Monthly gross income: $11,667
• GDS cap: 39% × $11,667 = $4,550/month for shelter
• TDS cap: 44% × $11,667 − $450 other debts = $4,683/month for shelter (so GDS binds first)
• Shelter budget after $450 property tax + $125 heat: $3,975/month for mortgage P+I
• Mortgage capacity at 6.84% qualifying: ~$555k
• Max purchase price: ~$635k

Related calculators

• Stress test deep-dive
• Pre-approval amount
• Debt-to-income ratio
• Down payment + CMHC
• Land transfer tax
• Total closing costs