How Much Mortgage Can I Afford in Canada?

Enter your income, debts, and down payment into the math below to see your maximum mortgage. This guide uses the same GDS and TDS formulas every major Canadian lender runs, plus the current 2026 stress test rate, so your estimate matches what a bank will actually approve not a rough guess.

How Much Mortgage Can You Afford in Canada Right Now?

Most buyers in Canada qualify for a mortgage worth 4 to 4.5 times their gross annual household income, after the federal stress test reduces the lender’s approved amount. A household earning $100,000 a year typically qualifies for a mortgage between $400,000 and $450,000, before down payment, debt, and location adjustments shift the number up or down. Your actual limit depends on four inputs: gross income, existing debt, down payment size, and the interest rate your lender stresses you against. Two people earning the same salary can qualify for very different amounts once their car loans, credit card balances, and condo fees enter the calculation.

Your four inputs:

• Gross annual household income
• Monthly debt payments (loans, credit cards, lines of credit)
• Down payment amount
• Stress-tested qualifying rate (not your contract rate)

What Is the Mortgage Stress Test in Canada?

The mortgage stress test requires every federally regulated Canadian lender to qualify you at a higher interest rate than the one you’ll actually pay. The Office of the Superintendent of Financial Institutions (OSFI) sets this rule under Guideline B-20, and it applies to insured and uninsured mortgages alike. Lenders use the higher of your contract rate plus 2 percentage points or a 5.25% floor rate, and in 2026’s rate environment, contract-plus-two almost always wins. A contract rate of 5.0% gets stress-tested at 7.0%, which shrinks the mortgage amount you’d otherwise qualify for by roughly 15% to 20%. One exception matters for renewals: since November 2024, switching lenders without changing your loan amount or amortization no longer triggers the stress test.

Qualifying rate formula: Contract rate + 2%, or 5.25%, whichever is higher.

How Do GDS and TDS Ratios Set Your Mortgage Limit?

Lenders cap your mortgage using two debt ratios: Gross Debt Service (GDS) at 39% and Total Debt Service (TDS) at 44%. GDS measures your mortgage payment, property tax, heating costs, and half of any condo fees against your gross monthly income. TDS adds every other debt payment on top — car loans, student loans, credit card minimums, and lines of credit — and caps the combined total against the same income figure. Both ratios get calculated at the stress-test rate, not your contract rate, so the number that actually controls your approval sits well above what you’ll pay month to month.

Ratio	Covers	Maximum
GDS	Mortgage payment + property tax + heat + 50% condo fees	39% of gross income
TDS	GDS costs + all other debt payments	44% of gross income

A borrower carrying $500 in monthly non-mortgage debt typically loses $80,000 to $100,000 of mortgage room compared to a debt-free applicant with identical income.

How Much Down Payment Do You Need in Canada?

Minimum down payment in Canada runs on a sliding scale tied to purchase price. Homes priced up to $500,000 require 5% down. Between $500,000 and $1,499,999, the rule splits: 5% on the first $500,000 and 10% on the portion above it. At $1,500,000 or more, you need 20% down, and the mortgage no longer qualifies for default insurance.

Home Value	Minimum Down Payment
Up to $500,000	5% of the price
$500,000–$1,499,999	5% on first $500K, 10% on the rest
$1,500,000 or more	20% of the price

Any down payment below 20% triggers mandatory mortgage default insurance through CMHC, Sagen, or Canada Guaranty, and the premium gets added to your mortgage balance rather than paid upfront.

How Does the RRSP Home Buyers’ Plan Boost Your Down Payment?

Yes, first-time buyers can withdraw up to $60,000 from an RRSP tax-free through the Home Buyers’ Plan (HBP), or $120,000 per couple. Funds need to sit in the account for at least 90 days before withdrawal, and repayment starts two years later, spread over 15 years at a minimum of one-fifteenth per year. Missing a scheduled repayment adds that year’s amount to your taxable income instead of penalizing you outright.

HBP quick reference:

• Withdrawal limit: $60,000 per person / $120,000 per couple
• Holding period: 90 days minimum before withdrawal
• Repayment: 1/15th per year, starting year two

What Other Costs Reduce How Much Mortgage You Can Afford?

Property tax, heating, condo fees, and closing costs all reduce the mortgage amount a lender will approve, even though none of them show up in the purchase price. Property tax and heating factor directly into your GDS ratio, so a home with a $400 monthly property tax bill leaves less room for mortgage principal than an identical home taxed at $250. Closing costs typically run 1.5% to 4% of the purchase price and cover legal fees, land transfer tax, title insurance, and adjustments — money you’ll need on top of your down payment, not from it. Condo buyers face an added wrinkle: only 50% of monthly condo fees count toward GDS, but the full amount still leaves your bank account.

How Much Mortgage Can a $90,000 Salary Afford in Canada?

A single applicant earning $90,000 a year with no other debt and 20% down typically qualifies for a mortgage between $410,000 and $430,000 in 2026. At a 5.0% contract rate stressed to 7.0%, the GDS ceiling of 39% limits the monthly housing payment to roughly $2,340, factoring in an estimated $300 for property tax and heat.

Sample scenario:

Input	Value
Gross income	$90,000/year
Contract rate / stress rate	5.0% / 7.0%
Down payment	20%
Other debt	$0
Estimated max mortgage	$410,000–$430,000

Add $10,000 in car loan and credit card debt, and the TDS ratio typically pulls that maximum down by $40,000 to $50,000. Move the same applicant to a 5% down payment instead of 20%, and CMHC insurance premiums eat into the number further, even though the smaller down payment initially looks like it stretches buying power.

How Can You Qualify for a Larger Mortgage?

Five actions increase how much mortgage you qualify for: paying down existing debt, adding a co-borrower’s income, raising your down payment, extending your amortization, and improving your credit score. Paying off a $400 monthly car loan can restore $60,000 to $70,000 of mortgage room by freeing up TDS space. Adding a co-signer’s income raises the gross figure both ratios get measured against, which works especially well for couples buying their first home together. Extending amortization from 25 to 30 years — available to first-time buyers and new-construction purchases — lowers the stressed monthly payment and increases the maximum mortgage, though it adds years of interest cost over the life of the loan.

Get Your Exact Number

Run your own income, debt, and down payment through a GDS/TDS calculator to see your maximum mortgage before you contact a lender. Knowing your stress-tested number ahead of time keeps you from wasting time on listings above your real budget — calculate your maximum mortgage now.

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