Mortgage Affordability Calculator
The question every buyer asks: what's the most expensive home I actually qualify for? This works it out the way a Canadian lender does. GDS and TDS ratios, the stress test, and your down payment's own ceiling.
Rates & rules verified · July 2026Primary sources: OSFI – Guideline B-20 (mortgage underwriting) · FCAC – Down payment requirements · CMHC – Mortgage loan insurance
How rates move your budget
Maximum purchase price at contract rates from 3% to 7%, everything else held constant. The stress test amplifies every move.
Price by down payment
What you could buy at different down-payment percentages of the resulting price. More down means less CMHC, and past 20% no insurance at all.
| Down % | Down $ | Max price | Mortgage | CMHC | Payment/mo |
|---|
How this is calculated
The two ratios lenders use
Every Canadian lender runs your numbers through two debt-service tests and takes the lower result:
GDS (Gross Debt Service), max 39%. Housing costs only: GDS budget = income ÷ 12 × 0.39. Housing = mortgage payment + property tax + heat + ½ of condo fees.
TDS (Total Debt Service), max 44%. Housing plus every other debt payment: TDS budget = income ÷ 12 × 0.44 − monthly debts.
Your money available for principal & interest is min(GDS, TDS) − tax ÷ 12 − heat − 0.5 × condo. Whichever ratio produces the smaller housing budget is the one that binds, the calculator names it in the verdict box.
The stress test (why qualifying ≠ contract)
OSFI B-20 requires lenders to test you at the qualifying rate, the greater of your contract rate + 2% or 5.25%. The maximum mortgage is solved from the qualifying payment, so the mortgage you can borrow is smaller than a naïve calculator at your contract rate would suggest. The monthly payment shown in the metrics is then re-computed on that mortgage at your real contract rate, which is why it's lower than the qualifying payment you were tested against.
Solving for the loan
Given the available payment pay, the maximum loan is the present value of that payment stream: L = pay × (1 − (1 + r)⁻ⁿ) ÷ r, where n is amortization in months and r = (1 + qualifying ÷ 2)^(2/12) − 1, the effective monthly rate from Canada's semi-annual compounding.
CMHC and the down payment ceiling
Below 20% down, default insurance is mandatory and its premium (0.60%–4.00% of the loan, +0.20% for an insured 30-year amortization for first-time buyers and new builds) is added to the mortgage. Because the premium depends on the loan-to-value, which depends on the price, the calculator iterates a few times to a stable answer. Two hard ceilings can override your income: the minimum down payment (5% of the first $500,000, 10% above, 20% at $1.5M+) and the rule that insured mortgages are unavailable at $1.5M or more. When one of these caps your price below your income-based budget, the verdict box flags it. A non-first-time buyer (and non-new-build) with less than 20% down is limited to a 25-year amortization, so choosing 30 years does not raise their budget, toggle First-time buyer or new build if it applies (rule in force December 15, 2024).
What this doesn't model
Land transfer tax, closing costs, lender-specific overlays, self-employment income adjustments, or credit-score pricing. Property tax defaults to a flat $4,000 rather than a percentage of the (unknown) price. Pair this with the mortgage payment calculator, land transfer tax calculator, and rent vs. buy calculator for the full picture. Rules and tiers confirmed as of July 2026 (OSFI B-20, CMHC, FCAC).
Common questions
How do Canadian lenders decide how much mortgage I can afford?
Lenders apply two debt-service ratios. Gross Debt Service (GDS) caps your housing costs, mortgage payment, property tax, heat, and half of condo fees, at 39% of gross income. Total Debt Service (TDS) caps housing plus all other debt payments at 44%. Your budget is the lower of the two, and the mortgage payment is tested at the stress-test rate, not your contract rate.
What is the mortgage stress test in 2026 and how does it affect affordability?
Under OSFI B-20 you must qualify at the greater of your contract rate plus 2% or 5.25%. With a 4.44% contract rate you qualify at 6.44%. Because the qualifying payment is higher than what you actually pay, the stress test lowers the maximum mortgage you can borrow even though your real payment is smaller.
Does my down payment limit how much house I can buy?
Yes. Canada requires a minimum of 5% down on the first $500,000 and 10% on the portion above, and 20% on homes of $1.5M or more. Mortgage default insurance is only available below 20% down and below the $1.5M price. If your saved down payment is small, the minimum-down-payment rule can cap your price below what your income alone would allow.
Why is the payment I qualify for higher than the payment I actually make?
The stress test qualifies you at a higher rate (contract + 2% or 5.25%). The maximum mortgage is solved from that inflated qualifying payment, but your real monthly payment on that same mortgage is calculated at your lower contract rate, so the payment you actually make is smaller than the one you were tested against.
How is CMHC insurance handled in the affordability calculation?
If you put down less than 20%, mortgage default insurance is required and its premium (0.60% to 4.00% of the loan by loan-to-value, plus 0.20% for an insured 30-year amortization) is added to the mortgage. This calculator solves for the maximum insured mortgage your qualifying payment supports, then works backward to the purchase price.