How Much Mortgage Can I Afford in Canada?
The most common first question any homebuyer asks is "how much can I actually borrow?" In Canada, the answer is determined by two debt-service ratio limits, a mandatory stress test, and your down payment.
The two debt-service ratios
Gross Debt Service (GDS) ratio
GDS = (monthly mortgage payment + property tax + heating + 50% of condo fees) ÷ gross monthly income
The limit is 39% for insured mortgages.
Total Debt Service (TDS) ratio
TDS = (all GDS items + all other monthly debt payments) ÷ gross monthly income
The limit is 44%. Other debt includes car loans, student loans, credit card minimums, and lines of credit.
Quick household income examples
These estimates assume 20% down, 5.00% fixed rate, 25-year amortization, stress-tested at 7.00%:
| Gross household income | Approximate max mortgage | Approximate max home price (20% down) |
|---|---|---|
| $80,000 | $370,000 | $463,000 |
| $120,000 | $555,000 | $694,000 |
| $150,000 | $695,000 | $869,000 |
| $200,000 | $925,000 | $1,156,000 |
| $250,000 | $1,155,000 | $1,444,000 |
The hidden costs that reduce your effective budget
- Land transfer tax — $5,000–$20,000+ depending on province and price
- Legal fees — $1,200–$2,000
- Home inspection — $400–$700
- Title insurance — $200–$400
- Moving costs — $1,000–$5,000
Budget at least 1.5%–2% of the purchase price for closing costs on top of your down payment.
Use our calculator with different down payment amounts to see how your monthly payment changes.
