Find out how much house you can afford based on your income, debts, down payment and interest rate.
Rates as of Q2 2025 (example)
This calculator estimates the maximum home price you could likely afford, based on your income, existing monthly debts, down payment, and a target debt-to-income ratio — similar to the affordability checks lenders use when assessing a mortgage application in Canada.
This calculator works backwards from your maximum allowable housing payment (your income × debt-to-income ratio, minus your existing debts) to find the home price that, combined with your down payment, would produce a monthly payment (principal & interest, property tax, and insurance) equal to that maximum.
Formula: Max Housing Payment = (Annual Income ÷ 12 × Debt-to-Income Ratio) − Monthly Debts. Home Price is then solved so that: (Loan Amount × Monthly P&I Factor) + (Home Price × Monthly Property Tax Rate) + Monthly Insurance + Condo Fees = Max Housing Payment, where Loan Amount = Home Price − Down Payment.
Example: With a CA$90,000 annual income, CA$500/month in existing debts, a CA$50,000 down payment, a 5.5% interest rate (example rate — enter your actual rate) over 25 years, a 39% debt-to-income ratio, a 1% property tax rate, and CA$1,200/year home insurance, the maximum housing payment is CA$2,425/month, giving an estimated maximum home price of roughly CA$377,397 (loan amount about CA$327,397, with a monthly payment of about CA$2,010.50 in principal & interest plus CA$314.50 in property tax). (Note: this example is for illustration purposes only and does not represent mortgage pre-approval.)
Canadian lenders typically assess affordability using two debt service ratios: the Gross Debt Service (GDS) ratio, which compares your housing costs (mortgage payment, property tax, heating, and 50% of condo fees if applicable) to your gross income (commonly capped around 39%), and the Total Debt Service (TDS) ratio, which adds your other debt payments (car loans, credit cards, lines of credit) on top of housing costs, compared to gross income (commonly capped around 44%). This calculator uses a single combined ratio as a simplification of these two limits. Beyond affordability ratios, if your down payment is less than 20% of the home price, you'll need mortgage loan insurance (such as through CMHC), which adds a premium and may affect your maximum loan amount — see our CMHC Insurance Calculator. Federally regulated lenders also apply a mortgage stress test, qualifying you at a rate higher than your contract rate — see our Mortgage Stress Test Calculator, as this could reduce your actual approved amount compared to this calculator's estimate, which uses your entered rate directly. Remember this calculator estimates what you could theoretically afford based on the numbers entered — your actual mortgage pre-approval will depend on a full assessment by a lender, including your credit history and other factors.
The Gross Debt Service (GDS) ratio compares your housing-related costs (mortgage payment, property tax, heating costs, and typically 50% of condo fees) to your gross (before-tax) income. Canadian lenders commonly cap this ratio around 39%, meaning your housing costs generally should not exceed about 39% of your gross income.
The Total Debt Service (TDS) ratio is similar to the GDS ratio but also includes your other debt payments, such as car loans, credit card minimum payments, and lines of credit. Canadian lenders commonly cap this ratio around 44%, meaning your total debt payments (housing plus other debts) generally should not exceed about 44% of your gross income.
This calculator uses simplified assumptions, including the interest rate you enter directly. In reality, federally regulated lenders must qualify you using a mortgage stress test rate, which is typically higher than the contract rate you'd actually pay - this can reduce your maximum approved amount. Lenders also consider your credit history, employment stability, and other factors not included here.
A larger down payment reduces the loan amount needed for a given home price, which reduces your monthly principal and interest payment - allowing you to afford a higher home price within the same monthly payment budget. A down payment of 20% or more also avoids the need for mortgage loan insurance, which can otherwise add to your loan amount.
No. This calculator focuses on ongoing affordability (your monthly payment relative to your income), not one-time closing costs. Land transfer tax, legal fees, and other closing costs are paid separately, typically from your own funds in addition to your down payment - use our Land Transfer Tax Calculator to estimate this additional cost.
Existing monthly debt payments directly reduce your maximum housing payment in this calculator (since your total debt service ratio must cover both housing and existing debts), which reduces the estimated home price you could afford. Paying down existing debts before applying for a mortgage can therefore increase your borrowing capacity.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute a mortgage offer, pre-approval, or financial advice. This calculator uses simplified debt-to-income assumptions and does not account for the mortgage stress test, mortgage insurance premiums, credit history, or other factors lenders consider. Actual mortgage approval amounts vary by lender and depend on a full assessment of your individual circumstances. Always consult a mortgage broker or lender for an accurate pre-approval.