🏠 Home Affordability
Max home price based on your income and debts
How it works
This calculator estimates how much house you can afford based on your income, debts, down payment, mortgage rate, and amortization. Canadian lenders do not just look at your salary — they apply two affordability ratios set by regulators. The Gross Debt Service (GDS) ratio caps your housing costs at 32% of gross income, and the Total Debt Service (TDS) ratio caps housing costs plus all other debt payments at 40%.
Housing costs in the GDS include your mortgage payment, property taxes, heating, and half of any condo fees. TDS adds car loans, student loans, credit card minimums, and lines of credit. Staying within these ratios is not just a lender rule — a genuinely useful guardrail against buying more house than your budget can carry.
The formula
GDS = (mortgage payment + property tax + heating + 50% of condo fees) ÷ gross monthly income ≤ 32%. TDS = (GDS costs + all other monthly debt payments) ÷ gross monthly income ≤ 40%. Rearranged: max monthly housing budget = gross monthly income × 0.32 (subtract taxes and heating to find the mortgage payment you can carry); max home price = max mortgage + down payment.
Worked example
Household income of $120,000 means $10,000 per month. GDS budget: $10,000 × 0.32 = $3,200 for housing. Subtract $500 for property tax and heating, leaving $2,700 for the mortgage payment. At 5% over 25 years, each $100,000 borrowed costs about $585 per month, so $2,700 supports roughly a $460,000 mortgage. With a $100,000 down payment, the affordable price is about $560,000 — provided TDS also clears with your other debts.
Frequently asked questions
What is the mortgage stress test?
Lenders must qualify you at the higher of your contract rate plus 2% or a regulatory benchmark — even though you pay the lower contract rate. It ensures you could still afford payments if rates rise.
How much down payment do I need in Canada?
A minimum of 5% on the first $500,000 and 10% on the amount above that. Putting down 20% or more lets you skip mandatory CMHC mortgage insurance.
Why does TDS matter if my GDS is fine?
Because a big car payment or student loan eats the same income your mortgage needs. Many buyers pass the housing test but fail TDS — paying down other debts is often the fastest way to raise your affordable price.