Mortgage affordability calculator Canada: how much house can you afford?
With $100,000 of household income, $50,000 down and a 4.5% rate over 25 years, the calculator puts your maximum home price at about $366,000. Lenders qualify you at the higher of your rate plus 2% or 5.25%, and the calculator keeps your housing costs within 32% of gross income and all debt payments within 40%. Your down payment sets a second limit: 5% of the first $500,000, 10% of the portion above it, and 20% at $1.5 million or more.
Mortgage affordability
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How to use the mortgage affordability calculator
Enter your income, savings and costs and the results update as you type. Your inputs are kept in the page address, so you can bookmark a scenario or send it to your advisor.
Total household income before tax, for everyone on the mortgage. The starting value is $100,000.
The savings you will put down. It sets the price limit under the minimum down payment rules. The starting value is $50,000.
The rate you expect to be offered. The calculator qualifies you at the higher of this rate plus 2% or 5.25%, and shows your payment at the rate itself. The starting value is 4.5%.
The years to pay the mortgage off: 15, 20, 25 or 30. With less than 20% down the maximum is 25 years, or 30 years for first-time buyers and buyers of a newly built home. The starting value is 25 years.
Car loans, student loans, credit card and line of credit payments. They count toward total debt service only.
Your annual property tax and monthly heating estimate count in both ratios, and half of any condo fees counts. The starting values are $4,000 a year of property tax and $150 a month for heating.
How to read your result
The calculator works backwards from your income: it finds the largest payment the ratios allow, turns it into a mortgage at the stress test rate, and adds your down payment.
Maximum home price
The headline is the highest price you could qualify for, with the mortgage beneath it. When you put less than 20% down, the mortgage includes an estimated CMHC premium. With the starting values the price is $366,156 and the mortgage $325,956, including a premium of $9,801: 3.10% of the loan at this loan-to-value.
Debt service ratios
GDS (gross debt service) is your mortgage payment, property tax, heating and half of any condo fees as a share of gross monthly income. TDS (total debt service) adds your other debt payments. Each bar shows your ratio against its limit. Both sit below the limit at the starting values, 27.4%, because you qualified at the 6.50% stress test rate and the ratios use your actual 4.5% payment.
When the down payment is the limit
If your income would support a higher price than your down payment allows, the price is capped and a note says so. With $125,000 to $300,000 down the cap is just under $1.5 million, because mortgage loan insurance is not available at $1.5 million or more and a purchase at that price needs 20% down.
Monthly payment and total interest
The payment uses your actual rate with semi-annual compounding, the way Canadian fixed-rate mortgages are calculated. Total interest paid assumes that rate holds for the whole amortization. Your rate is reset at each renewal, so read it as a way to compare scenarios, not a forecast.
Minimum down payment by purchase price
The down payment rules work in two tiers up to $1.5 million, then jump to 20%. These are the federal minimums; a lender can ask for more.
Below $1.5 million: 5% of the first $500,000 plus 10% of the rest. At $1.5 million or more: 20%.
Your mortgage inside a financial plan
The calculator answers the lender's question: the most you could qualify for. The planning question is different. A payment sized to the limit leaves less for RRSP and TFSA contributions, for paying the mortgage down faster, and for the year you hope to stop working, and it has to survive a renewal at a higher rate.
Once you own the home, the next decision is what to do with spare cash flow. The pay off mortgage or invest calculator compares the two month by month, and the TVM calculator works out the payment on any loan.
Where the home fits beside your savings, tax and retirement is the work of financial planning in Calgary with Kaetyn.
Mortgage affordability questions
Answers drawn from the calculator's own rules and assumptions.
It depends on your income, your down payment, your other debts and the rate you qualify at. The calculator finds the largest mortgage that keeps your housing costs within 32% of gross income and all debt payments within 40%, tested at the higher of your rate plus 2% or 5.25%, then adds your down payment. With $100,000 of household income, $50,000 down and a 4.5% rate, that is a home of about $366,000.
Federally regulated lenders must check that you could still afford your payments at a higher rate: the greater of your mortgage contract rate plus 2% or 5.25%. At a 4.5% rate you qualify at 6.50%. The calculator applies this rate to find your maximum mortgage, then shows your actual payment at the rate you enter.
At least 5% of a price up to $500,000. Between $500,000 and $1.5 million, 5% of the first $500,000 plus 10% of the portion above it. At $1.5 million or more, 20%, because mortgage loan insurance is not available at that price. With less than 20% down you will typically need mortgage loan insurance. The calculator adds CMHC's premium to the mortgage: 2.80% of the loan at 80.01% to 85% loan-to-value, 3.10% at 85.01% to 90% and 4.00% at 90.01% to 95%.
The stress test, down payment and insurance rules are federal, so they work the same way in Calgary or Edmonton as anywhere in Canada. What changes is local: enter your municipal property tax estimate and heating costs. Alberta has no land transfer tax, but buyers pay Land Titles registration fees on the transfer and the mortgage, which the calculator does not include.
It is an estimate for educational purposes. Actual approval depends on your credit, employment history and the lender's own criteria, and many lenders use different debt service limits. The CMHC premium uses CMHC's published rates, and closing costs such as legal fees, registration fees and moving costs are not included.
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