Mortgage Affordability Calculator — Maximum Purchase Price & Stress Test

What Does the Mortgage Affordability Calculator Show?

The affordability calculator applies current Canadian lending rules: it computes the GDS 39% cap and TDS 44% cap using the OSFI stress test qualifying rate (the higher of contract rate + 2% or 5.25%), then adds CMHC insurance premium if your down payment is under 20%. The lower of GDS-binding and TDS-binding maximums determines your maximum mortgage; adding down payment gives your maximum purchase price. The calculator output reflects the binding constraint — typically GDS for low-debt borrowers, TDS for high-debt borrowers, or the down payment minimum for first-time buyers.

This mortgage affordability calculator applies current Canadian lending rules — GDS and TDS ratio limits, the OSFI B-20 stress test, and CMHC insurance thresholds — to estimate the maximum purchase price and maximum mortgage you can qualify for based on your household income, down payment, and existing monthly debts.

CMHC Housing Affordability Guidelines

CMHC's 30% affordability guideline and the GDS ratio both compare housing costs to gross income, but because they use different cost definitions they are directionally similar — not numerically identical. As a rough check, if your GDS is well above 30% your budget is likely strained on CMHC's shelter-cost definition too. Lenders will approve mortgages up to a 39% GDS (CMHC's insured-mortgage maximum), which means a mortgage can be technically approvable while still being above CMHC's 30% affordability threshold.

Qualifying for a mortgage and comfortably affording one are not the same. This calculator shows the maximum you qualify for under federal stress test rules. Use CMHC's 30% guideline as a directional sanity check: if your housing costs are well above 30% of your gross income, your budget has less cushion for rate increases, job changes, or unexpected repairs.

Maximum Purchase Price vs. Maximum Mortgage Amount

Maximum mortgage is how much a lender will approve for your loan balance. Maximum purchase price adds your down payment to the maximum mortgage — the total value of home you can buy. A buyer with $100,000 down and a $500,000 maximum mortgage has a $600,000 maximum purchase price. CMHC insurance, if applicable, may be added to the mortgage balance and affects your monthly payment and qualification ratios. Use our mortgage payment calculator to model any specific loan amount and amortization.

For the lender's approval ceiling (not just your budget), use our Mortgage Qualifier Calculator. For a full walkthrough of the qualification process, read how to qualify for a mortgage in Canada. Related tools (second property, land transfer tax, HELOC/refinance) are listed at the bottom of this page.

How the Mortgage Stress Test Works in Canada

Canada's mortgage stress test requires borrowers at federally regulated lenders to qualify at the higher of their contract rate plus 2% or 5.25%, whichever is greater. A borrower offered a 4.5% five-year fixed rate must qualify at 6.5%; at $100,000 household income, this reduces maximum affordability by approximately 17–18% compared to qualifying at the actual contract rate. The stress test applies to all new mortgages, refinances, and lender switches that change the mortgage amount or amortization. Since November 21, 2024, OSFI no longer expects federally regulated lenders to apply the qualifying rate to uninsured straight switches at renewal where the mortgage amount and amortization do not change. The stress test does not change the actual monthly payment or interest rate charged — only the income required to qualify.

Qualifying Rate — Contract Rate + 2% or 5.25%, Whichever Is Higher

The qualifying rate formula is MAX(contract rate + 2%, 5.25%). At a 4.5% contract rate, the qualifying rate is 6.5%. At 3.0%, the floor of 5.25% applies. The stress test ensures borrowers can service payments after a 2-percentage-point rate increase over their mortgage term. Read what is the mortgage stress test for a full walkthrough, or use our mortgage stress test calculator to model your specific qualifying rate.

How the Stress Test Reduces Affordability

In Canada, all federally regulated mortgage lenders must apply the mortgage stress test — borrowers qualify at the higher of their contract rate plus 2% or 5.25% — meaning a buyer offered a 4.5% rate must demonstrate they can service payments at 6.5%, reducing maximum affordability by approximately 17–18%. At $100,000 household income with no other debts, this translates to roughly $60,000–$80,000 less in maximum mortgage compared to qualifying at the contract rate alone.

GDS and TDS Ratios — How Lenders Measure Affordability

Canadian mortgage lenders assess affordability using two debt-service ratios. The gross debt service (GDS) ratio measures total monthly housing costs — mortgage principal and interest, property taxes, heating, and 50% of condo fees — as a percentage of gross household income. The maximum GDS is 39%. The total debt service (TDS) ratio adds all other monthly debt obligations (car loans, credit card minimums, student loans, lines of credit) to housing costs. The maximum TDS is 44%. For a $500,000 mortgage at 4.5% over 25 years ($2,767/month) at $120,000 household income with $500/month in other debts, the GDS is 33.2% and the TDS is 38.2% — both within qualifying limits.

Gross Debt Service (GDS) Ratio — 39% Limit

GDS = (mortgage P&I + property taxes + heating + 50% of condo fees) ÷ gross monthly income × 100. Canadian mortgage lenders apply a GDS limit of 39% — total monthly housing costs cannot exceed 39% of gross income. The CMHC housing affordability threshold is 30% GDS; exceeding it means the mortgage is technically approvable but leaves less cushion for rate increases or unexpected costs.

Total Debt Service (TDS) Ratio — 44% Limit

TDS adds all non-housing monthly debts to the GDS numerator: car loans, student loans, personal loans, and credit card minimums (lenders typically use about 3% of outstanding balance). The maximum TDS is 44%. If TDS — not GDS — is the binding constraint on your qualification, reducing non-mortgage debt has a direct positive impact on your maximum mortgage. Total housing costs plus other debts cannot exceed 44% of gross income, regardless of the mortgage amount applied for.

$120,000 household income ($10,000/month gross). GDS: $3,317 ÷ $10,000 = 33.2%. TDS: $3,817 ÷ $10,000 = 38.2%. Both within OSFI B-20 qualifying limits.

CMHC Mortgage Insurance — How It Affects Affordability

CMHC mortgage insurance (also called mortgage default insurance) is required when the down payment is less than 20% of the purchase price, at federally regulated lenders. As of December 2024, CMHC insured mortgages are available on homes priced below $1.5 million — raised from the previous $1 million ceiling. First-time buyers and buyers of new construction with CMHC-insured mortgages can access 30-year amortization. CMHC premiums range from 2.80% (15–19.99% down payment) to 4.00% (5–9.99% down payment), and are typically added to the insured mortgage principal. A 5% down payment on a $500,000 home — $25,000 down — results in a CMHC premium of approximately $19,000 (4.00% × $475,000), bringing the total insured mortgage to roughly $494,000.

CMHC Insurance Premiums by Down Payment

The CMHC premium is added to your mortgage principal, increasing your loan balance and monthly payment. At 5–9.99% down: premium is 4.00%. At 10–14.99% down: 3.10%. At 15–19.99% down: 2.80%. No premium at 20%+ down. Use our down payment calculator to see the exact CMHC premium for any purchase price and down payment combination.

Minimum Down Payment by Purchase Price

As of December 2024, CMHC mortgage insurance is available on homes priced below $1.5 million — up from the previous $1 million ceiling — and first-time buyers and buyers of new construction with insured mortgages can now access 30-year amortization, reducing monthly payments by approximately 8.2% compared to the standard 25-year term. For homes priced at $1.5 million or more, a minimum 20% down payment is required (CMHC insurance is not available).

Down payment formula for insurable homes (below $1.5M): 5% on first $500K + 10% on remainder. Verified: $750K = $25K + $25K = $50K; $1M = $25K + $50K = $75K. At exactly $1,500,000 or more, CMHC insurance is not available — the federal minimum jumps to 20% ($300,000 on a $1.5M home).

How Much Mortgage Can I Afford in Canada?

At $100,000 household income with a 5% down payment and no other debts, the mortgage affordability calculator typically returns a maximum purchase price of $400,000–$480,000, depending on the contract rate offered and the qualifying rate applied. At $120,000 household income at a 6.5% qualifying rate, the maximum mortgage is approximately $500,000. A 30-year amortization — available for first-time buyers and buyers of new construction on CMHC-insured mortgages as of December 2024 — reduces the monthly payment by approximately 8.2% compared to 25 years: a $500,000 mortgage at 4.5% drops from $2,767/month (25yr) to approximately $2,539/month (30yr), improving both GDS and TDS ratios and increasing the maximum purchase price that can be qualified for.

Affordability at $100,000 Household Income

In Canada, all federally regulated mortgage lenders must apply the mortgage stress test — borrowers qualify at the higher of their contract rate plus 2% or 5.25% — meaning a buyer offered a 4.5% rate must demonstrate they can service payments at 6.5%, reducing maximum affordability by approximately 17–18%. At $100,000 income, the GDS ceiling of 39% allows roughly $3,250/month in housing costs. Subtracting estimated property taxes ($350/month) and heating ($150/month) leaves approximately $2,750/month for the mortgage payment, supporting a maximum mortgage of $400,000–$430,000 at the stress test qualifying rate.

Affordability at $120,000 Household Income

At $120,000 household income ($10,000/month gross), a $500,000 mortgage at 4.5% over 25 years produces a GDS of 33.2% and a TDS of 38.2% (with $500/month in other debts) — both within qualifying limits. The 30-year amortization option available to first-time buyers and buyers of new construction lowers the monthly payment to approximately $2,539, improving both ratios and allowing a higher maximum mortgage at the same income. Actual maximum purchase price depends on down payment, property tax estimates, and any other monthly debts you carry.