How this calculator works
Canadian lenders do not approve you based on the rate you are offered. They first apply the mortgage stress test: you must be able to afford payments at a qualifying rate equal to the greater of your contract rate plus 2 percentage points, or 5.25%. If you are offered 4.50%, you are qualified at 6.50%. If you are offered 3.00%, you are qualified at the 5.25% floor.
At that qualifying rate, two ratios must stay under their limits. Your Gross Debt Service (GDS) ratio — mortgage payment, property tax, heating, and half of any condo fees, divided by gross monthly income — must be 39% or lower. Your Total Debt Service (TDS) ratio adds every other debt payment (car loans, credit cards, lines of credit, student loans) and must be 44% or lower. Whichever ratio is tighter sets your maximum payment.
The calculator converts that maximum payment into a maximum mortgage using semi-annual compounding, then finds the highest purchase price where your down payment meets the legal minimum and the total mortgage — including any mortgage default insurance premium — still fits. It reports whether income or your down payment is the limiting factor.
What the result does not include
Lenders also look at your credit score, employment history, the property itself, and their own internal policies, and some use stricter ratios than the insurer maximums used here. Closing costs — land transfer tax, legal fees, inspection, and title insurance, often 1.5% to 4% of the price — must be paid in cash on top of your down payment and are not part of this estimate. Treat the result as a ceiling, not a target: our guide on how much home you can afford explains why many buyers deliberately stay well below their approval amount.
Ways to increase what you qualify for
Paying off a car loan or credit card balance often raises your maximum more than a raise does, because every dollar of monthly debt reduces your TDS room directly. A larger down payment helps twice: it reduces the amount borrowed and can lower or eliminate the insurance premium. First-time buyers and buyers of newly built homes can choose a 30-year insured amortization, which lowers the qualifying payment. Adding a co-borrower's income is another common route. For the full background on the qualifying rate, read The Mortgage Stress Test, Explained.
Frequently asked questions
Does the stress test apply if I have 20% down? Yes. Federally regulated lenders apply it to uninsured mortgages as well under OSFI's Guideline B-20. An exception exists for borrowers who switch lenders at renewal without increasing their loan.
Should I enter household or individual income? Enter the combined gross income of everyone who will be on the mortgage application, before tax.
Why is my maximum lower than an online pre-qualification? Many quick estimates skip the stress test or ignore heating and condo fees. This calculator includes them because lenders do.
Results are estimates for educational purposes and are not a loan approval or financial advice. Lenders and mortgage insurers may apply additional criteria. Confirm current rules with your lender, a licensed mortgage professional, or official government sources.