How Much Mortgage Can I Afford in Canada?
CMHC-compliant stress-test math. Free, instant, and built for Canadian buyers.
Understanding Mortgage Affordability in Canada
How much mortgage can you afford? A quick guide
Canadian lenders use two key ratios — GDS (Gross Debt Service) and TDS (Total Debt Service) — to decide how much you can borrow. GDS looks at housing costs (mortgage, taxes, heating) as a share of your gross income, capped at 39%. TDS adds all other debts and caps at 44%. Our calculator applies both ceilings automatically, so the number you see is the maximum a lender would consider before reviewing your credit history and employment stability.
What is the Canadian mortgage stress test?
Since 2018, all Canadian mortgage applicants must qualify at a stress-test rate — the higher of their contract rate plus 2%, or the Bank of Canada's qualifying rate (currently 5.25%). This ensures you can still make payments if rates rise. Even if your lender offers you 4.5%, you'd qualify at 6.5%. The stress test applies to purchases, renewals with a new lender, and refinances. Our calculator automatically applies this rule to give you a realistic affordability estimate.
How much down payment do you need in Canada?
The minimum down payment in Canada depends on the purchase price. For homes up to $500,000, you need at least 5%. For the portion between $500,000 and $1,499,999, you need 10%. Homes at $1.5 million or above require 20% down. If your down payment is less than 20%, you must pay CMHC mortgage insurance, which is added to your loan amount. A larger down payment means lower monthly payments and no insurance premium.
Should I get a 25- or 30-year mortgage?
A 25-year amortization is standard in Canada and results in higher monthly payments but significantly less interest paid over the life of the loan. A 30-year amortization lowers your monthly payment, which can help you qualify for a larger mortgage. However, 30-year amortizations are only available with a minimum 20% down payment (insured mortgages are capped at 25 years). Use our calculator to compare both options and see the impact on your affordability.
What is CMHC insurance?
CMHC (Canada Mortgage and Housing Corporation) mortgage insurance protects the lender if you default on your loan. It's required when your down payment is less than 20% of the purchase price. The premium ranges from 2.8% to 4.0% of the mortgage amount, depending on your loan-to-value ratio, and is added to your mortgage balance. While it increases your total borrowing cost, it allows you to buy a home sooner with a smaller down payment.