How much house can you actually afford?

Your bank's actual qualification process

For each candidate purchase price, we compute your monthly mortgage payment at the qualifying rate (the higher of contract + 2% or 5.25%). Then GDS and TDS:

qualifyingRate = max(contractRate + 2.00, 5.25)

GDS = (mortgage_at_q + property_tax + heat + 0.5 × condo_fees) / income
TDS = GDS items + other_debts / income

Pass if  GDS ≤ 39%  AND  TDS ≤ 44%

We also apply the down payment minimums (5% on the first $500K, 10% on $500K–$1M, 20% above $1M) and the CMHC premium tiers if you're putting less than 20% down. The mortgage payment itself uses Canadian semi-annual compounding under the Interest Act, the same formula your lender uses.

The output is the largest purchase price that passes all four tests. We binary-search the price space, which is why the answer updates instantly as you change inputs.

Frequently asked questions

What is the mortgage stress test in Canada?

Under OSFI's B-20 guideline, federally regulated lenders must qualify your mortgage at the higher of (a) your contract rate + 2 percentage points, or (b) 5.25% (the floor). So if your offered rate is 4.79%, the lender qualifies you at 6.79%. Your actual payment is at the lower contract rate — the stress test is just the qualification check. It applies to insured and uninsured mortgages at federally regulated lenders.

What are GDS and TDS, and why do they matter?

GDS (Gross Debt Service) is the share of your gross income that goes to housing costs — mortgage payment, property taxes, heating, and 50% of condo fees. The cap is 39%. TDS (Total Debt Service) adds in your other debt payments (credit cards, car loans, lines of credit) and caps at 44%. To qualify, you must pass both. They're calculated using the qualifying rate, not your actual contract rate.

What is the minimum down payment in Canada?

5% on the first $500,000 of the purchase price, 10% on the portion from $500,000 to $1,000,000, and 20% on homes priced $1,000,000 or more. Less than 20% down means default insurance is required (CMHC, Sagen, or Canada Guaranty), and the premium is added to your mortgage principal.

How is the CMHC premium calculated?

By down payment percentage: 5%–9.99% down = 4.00% premium, 10%–14.99% = 3.10%, 15%–19.99% = 2.80%, 20%+ = no premium. The premium is added to your mortgage balance and amortized over the life of the loan. PST on the premium is paid up-front in Ontario, Quebec, Saskatchewan, and Manitoba.

Can I get a 30-year amortization with less than 20% down?

Generally no. Insured mortgages — those with less than 20% down — are capped at 25-year amortization for most homes. There's a recent exception for first-time buyers purchasing newly built homes (30-year insured amortization), but it doesn't apply to resale homes. Uninsured mortgages (20%+ down) can go to 30 years at most lenders.

Why does my bank's number differ from this one?

Three reasons. (1) Your lender uses your verified income; we trust whatever you typed in. (2) GDS/TDS limits can be tightened by the lender's own underwriting policy below the OSFI maximums (e.g., some pull TDS to 42%). (3) Lenders factor in things this calculator doesn't — credit score, employment history, rental income offsets, beacon score adjustments. Use this for ballpark planning, not as a pre-approval substitute.