Simply the most comprehensive affordability calculator in Canada.†
The stress test rate has fallen by 15 basis points to 4.79%, 40 basis points lower than early 2020 and only 15 basis points above the record-low of 4.64%.
This comes as National Bank followed the rest of the Big 5 in cutting their posted 5-year fixed rate to 4.79% from 4.94%. BMO and CIBC lowered their rates over the weekend and TD and RBC lowered their rates last week.
As of August 12th, 2020, this has been confirmed by the Bank of Canada. Our calculator has been updated to reflect these new changes.
Here’s a breakdown of each factor impacting your home affordability and the limit it places on your asking price. Your affordability is the minimum of all the values shown.
Limiting Factor | Purchase Price Limit | |
---|---|---|
Minimum Down Payment | $ | 850,000850k |
TDS Ratio | $ | 00 |
GDS Ratio | $ | 00 |
Total Expenses | $ | 1,266,0001.27m |
Affordability calculators need to take into account government stress testing regulations published by the Office of the Superintendent of Financial Institutions (OSFI). You must still be able to afford your mortgage payments if your interest rate increases to the greater of
Want to take a closer look at your potential mortgage payments? Use our Mortgage Calculatorto estimate your future payments, find out how different interest rates affect you, and how much you'll pay over the course of your mortgage.
The CMHC has announced that on July 1st, 2020, they will be changing their guidelines for determining mortgage affordability. These changes include:
Before you get a mortgage from RBC, it is important to know how RBC calculates your mortgage affordability. RBC takes into account the following factors:
If your downpayment is less than 20%, RBC's mortgage affordability calculator also considers your mortgage insurance premiums. Unlike some other mortgage affordability calculators, RBC's mortgage affordability calculator does not take into account your location for property taxes and utility costs.
RBC calculates your mortgage limit using the current qualification rate and a maximum gross debt service (GDS) ratio of 32% and a maximum total debt service (TDS) ratio of 40%. These ratios are more strict than CMHC regulations, but you may still be able to get a mortgage with RBC even if you exceed these limits.
Another factor in determining your mortgage affordability is your downpayment. According to RBC, home buyers must have a minimum 5% downpayment for homes worth less than $500K. For homes between $500K and $1M, home buyers must at least 5% for the first $500K and 10% for the remaining amount. For homes worth more than $1M, home buyers must have a minimum 20% downpayment.
The above content is based on on our analysis of RBC's tools and software, and should be used for informational purposes only. WOWA.ca does not represent RBC and cannot guarantee the accuracy of the content. For the most up-to-date and accurate information, please consult with a mortgage broker or your local RBC branch advisor or mortgage specialist. Official calculator available on RBC's website.
Before you get a mortgage from Scotiabank, it is important to know how Scotiabank calculates your mortgage affordability. Scotiabank takes into account the following factors:
Scotiabank's mortgage affordability calculator does not take into account your downpayment. Instead, it finds your maximum mortgage limit and calculates your minimum downpayment for a home with that amount of mortgage.
Scotiabank calculates your mortgage limit using the current qualification rate and a maximum gross debt service (GDS) ratio of 35% and a maximum total debt service (TDS) ratio of 42%. This means that your mortgage payment, property tax, heating costs, and half of your condo fees (if applicable) cannot take up more than 35% of your gross income. In addition, this amount plus your total debt payments cannot take up more than 42% of your gross income.
Another factor in determining your mortgage affordability is your downpayment. According to Scotiabank, home buyers must have a minimum 5% downpayment for homes worth less than $500K. For homes between $500K and $1M, home buyers must at least 5% for the first $500K and 10% for the remaining amount. For homes worth more than $1M, home buyers must have a minimum 20% downpayment.
The above content is based on on our analysis of Scotiabank's tools and software, and should be used for informational purposes only. WOWA.ca does not represent Scotiabank and cannot guarantee the accuracy of the content. For the most up-to-date and accurate information, please consult with a mortgage broker or your local Scotiabank branch advisor or mortgage specialist. Official calculator available on Scotiabank's website.
Before you get a mortgage from TD Bank, it is important to know how TD calculates your mortgage affordability.TD takes into account the following factors:
Your location and property type are used to provide estimates for your potential property taxes, utilities, and condo fees.
TD calculates your mortgage limit using the current qualification rate and a maximum gross debt service (GDS) ratio of 35% and a maximum total debt service (TDS) ratio of 42%. This means that your mortgage payment, property tax, heating costs, and half of your condo fees (if applicable) cannot take up more than 35% of your gross income. In addition, this amount plus your total debt payments cannot take up more than 42% of your gross income.
Another factor in determining your mortgage affordability is your downpayment. According to TD, home buyers must have a minimum 5% downpayment for homes worth less than $500K. For homes between $500K and $1M, home buyers must at least 5% for the first $500K and 10% for the remaining amount. For homes worth more than $1M, home buyers must have a minimum 20% downpayment.
The above content is based on on our analysis of TD's tools and software, and should be used for informational purposes only. WOWA.ca does not represent TD and cannot guarantee the accuracy of the content. For the most up-to-date and accurate information, please consult with a mortgage broker or your local TD branch advisor or mortgage specialist. Official calculator available on TD's website..
Before you get a mortgage from BMO, it is important to know how BMO calculates your mortgage affordability. BMO takes into account the following factors:
BMO includes the cost of mortgage insurance in your mortgage affordability calculation. This allows you to borrow more (up to 95% of your future home's value) with a smaller downpayment.
BMO calculates your mortgage limit using the current qualification rate and a maximum gross debt service (GDS) ratio of 35% and a maximum total debt service (TDS) ratio of 42%. This means that your mortgage payment, property tax, heating costs, and half of your condo fees (if applicable) cannot take up more than 35% of your gross income. In addition, this amount plus your total debt payments cannot take up more than 42% of your gross income.
Another factor in determining your mortgage affordability is your downpayment. According to BMO, home buyers must have a minimum 5% downpayment for homes worth less than $500K. For homes between $500K and $1M, home buyers must at least 5% for the first $500K and 10% for the remaining amount. For homes worth more than $1M, home buyers must have a minimum 20% downpayment.
The above content is based on on our analysis of BMO's tools and software, and should be used for informational purposes only. WOWA.ca does not represent BMO and cannot guarantee the accuracy of the content. For the most up-to-date and accurate information, please consult with a mortgage broker or your local BMO branch advisor or mortgage specialist. Official calculator available on BMO's website.
Before you get a mortgage from CIBC, it is important to know how BMO calculates your mortgage affordability. CIBC takes into account the following factors:
CIBC includes the cost of mortgage insurance in your mortgage affordability calculation. This allows you to borrow more (up to 95% of your future home's value) with a smaller downpayment.
Another factor in determining your mortgage affordability is your downpayment. According to CIBC, home buyers must have a minimum 5% downpayment for homes worth less than $500K. For homes between $500K and $1M, home buyers must at least 5% for the first $500K and 10% for the remaining amount. For homes worth more than $1M, home buyers must have a minimum 20% downpayment.
The above content is based on on our analysis of CIBC's tools and software, and should be used for informational purposes only. WOWA.ca does not represent CIBC and cannot guarantee the accuracy of the content. For the most up-to-date and accurate information, please consult with a mortgage broker or your local CIBC branch advisor or mortgage specialist. Official calculator available on CIBC's website..
Your mortgage downpayment can impact your mortgage affordability. A larger downpayment can reduce your mortgage borrowing, lowering your interest costs and CMHC mortgage insurance premiums. A smaller downpayment could lead to higher interest costs, more expensive mortgage insurance and potentially even disqualify you from an insured mortgage if your debt servicing ratios are too high.
Recent changes to CMHC regulations has made it harder to get an insured mortgage, making your downpayment even more important. With a downpayment of 20% or more, you can have a conventional mortgage without mortgage insurance and skip both the fees and requirements of CMHC mortgage insurance.
An insured mortgage lets you buy a home with a downpayment of less than 20%, giving you more options and flexibility in choosing the right home. In addition, lenders usually offer the lowest mortgage rates to insured mortgages as their risk is covered by your mortgage insurance.
The Canadian Mortgage and Housing Corporation (CMHC) is a crown corporation that insures most mortgages in Canada. They charge an upfront fee or premium for mortgage insurance based on the amount of downpayment you have or the loan-to-value (LTV) of the mortgage. They offer insurance for mortgages with an LTV of up to 95%. The premium will be added onto your mortgage and amortized over the length of your mortgage. You may have to pay sales taxes on the insurance premium.
On June 4th, the Canadian Mortgage and Housing Corporation (CMHC) announced that it was making changes to its insured mortgages to "protect future home buyers and reduce risk". The new requirements include:
These changes go into effect on July 1st, 2020.
The lower debt service ratio requirements may impact borrowers with larger mortgages, lower income or additional debt. Debt service ratios measure how much of your income will be spent on paying the mortgage, bills associated with your home and payments on other debt.
Future buyers should try to pay off their other debt in order to bring their debt servicing ratios lower to meet the new requirements.
The higher credit score requirement of 680 (previously 620) may impact borrowers who have missed bill payments or have a limited credit history. Borrowers with a score lower than 680 will no longer be qualified for mortgage insurance by CMHC. Future buyers should look to improve their credit scores by paying their bills on time and making sure not to overutilize their credit.
Buyers with borrowed downpayments from lines of credit, a HELOC, or other types of loans must have a minimum of 5% downpayment from non-borrowed sources and cannot use the borrowed amounts to reduce theirCMHC insurance premium. Borrowers can still use the borrowed downpayment to reduce their mortgage amount, however.
In this case, only your $25K downpayment from savings would count for your CMHC mortgage insurance. You would effectively have a loan-to-value (LTV) of 95% for the purposes of CMHC mortgage insurance and would have to pay a 4% CMHC mortgage insurance premium.
However, your combined downpayment would still count towards your home price and mortgage. You would only have to borrow $450K from your mortgage, not $475K.
Previously, the full combined amount of $50K would be considered for CMHC mortgage insurance and you would only need to pay a 3.1% CMHC mortgage insurance premium.
There are a number of ways that borrowers can increase their mortgage affordability and lower their costs over the lifetime of their mortgage: