Mortgage Affordability Calculator
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How is my affordability calculated?
Here’s a breakdown of each factor impacting your home affordability and the limit it places on your purchase price. Your affordability is the minimum of all the values shown.
| Limiting Factor | Purchase Price Limit | |
|---|---|---|
| Minimum Down Payment | $900,000 | |
| TDS Ratio | $686,071 | |
| Stress Tested TDS | $580,537 | |
| GDS Ratio | $628,260 | |
| Stress Tested GDS | $528,503 | |
| Total Expenses | $1,259,198 | |
- Your down payment directly imposes a limit on your maximum purchase price.
- Under CMHC regulations, your total debt service (TDS) ratio cannot exceed 44%. The TDS ratio is calculated by dividing your total housing-related and debt expenses by your gross annual income. These expenses include:
- Your mortgage payment (both principal and interest)
- Your property tax
- Your heating costs
- Half of your condo fees (if applicable)
- Your Home Repair and Maintenance Cost
- All forms of debt payments
- Under CMHC regulations, your gross debt service (GDS) ratio cannot exceed 39%. The GDS ratio is calculated by dividing your annual housing-related expenses by your gross annual income. These expenses include:
- Your mortgage payment (both principal and interest)
- Your property tax
- Your heating costs
- Your Home Repair and Maintenance Cost
- Half of your condo fees (if applicable)
- Your total monthly expenses cannot exceed your net (after-tax) monthly income.
Stress Testing
Mortgage Stress Test Rates as of November 16, 2024
- Stress Test Rate: The higher of 5.25% and your mortgage rate + 2%
- The lowest stress test rate for insured mortgages (e.g. down-payment<20%) is: NaN%=% (Get This Rate) + 2%
- The lowest stress test rate for uninsured mortgages (e.g. down-payment≥20%) is: NaN%=% (Get This Rate) + 2%
- The lowest stress test rate for uninsurable mortgages (e.g. home prices ≥$1M or refinances) is: NaN%=% (Get This Rate) + 2%
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:
- A floor of 5.25%, and your mortgage interest rate plus a margin of 2%.
Mortgage Down payment and Affordability
Your mortgage down payment directly impacts your home affordability. A larger down payment can reduce your mortgage borrowing, lowering your interest costs and CMHC mortgage insurance premiums. A smaller down payment 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.
With a down payment of 20% or more, you can have a conventional mortgage without mortgage insurance and skip both the fees and requirements of CMHC mortgage insurance.
How to Increase Your Mortgage Affordability
There are a number of ways that borrowers can increase their mortgage affordability and lower their costs over the lifetime of their mortgage:
- Save up a larger down payment: A larger down payment can lower your mortgage borrowing and lead to smaller payments and less interest over the lifetime of your mortgage. You can also save on CMHC mortgage insurance and skip on mortgage insurance premiums altogether if you have a down payment of 20% or more.
- Increase your credit score: If you have a low credit score, increasing your credit score could help your eligibility for mortgage insurance and better terms on your mortgage. Lenders are willing to lend more to a borrower who has proven their ability to pay bills on time compared to one who has not.
- Shop around for rates: A lower mortgage interest rate can lower your regular mortgage payments, letting you handle a larger mortgage with your income. It can also save you tens of thousands over the course of your mortgage. Be sure to shop around for the best mortgage rates.
- Check out different lenders: Different lenders will have different standards for lending and offer different terms and conditions on their mortgages. Some offer additional features like RBC's Double-Up program. Going over your options with a mortgage broker can help you get the most from your mortgage.
- Increase your amortization: If you increase your amortization, you can reduce your regular payments and borrow more by spreading out the mortgage over a longer period of time. Doing so may increase your total mortgage interest cost, however, and decrease your choice of mortgage rates and lenders. Before committing to a decision, check how different amortizations will affect your mortgage and your monthly payments.
- Consider a Joint Mortgage: Combining your income with a spouse, friend, or anyone else will help you qualify for a mortgage. The higher joint income will have an easier time meeting debt service ratio requirements. This is known as a joint mortgage. However, if one partner begins missing payments, the other partner will be required to pay the difference or lose the home altogether.
CMHC Insurance
An insured mortgage lets you buy a home with a down payment 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 Canada 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 down payment 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 its length. In some provinces, you have to pay sales taxes on the insurance premium.
Down payment Impact on CMHC Mortgage Insurance Premiums for a $500K Home
CMHC Backs Down From COVID-19 Changes to Insurance Criteria
On July 5, 2021, the Canada Mortgage and Housing Corporation (CMHC) announced that it was reversing changes previously implemented in mid-2020:
- The Gross Debt Servicing (GDS) ratio limit was reset to 39% (previously 35%)
- The Total Debt Servicing (TDS) ratio limit was reset to 44% (previously 42%)
- At least one of the borrowers of the mortgage must have a credit score of at least 600 (previously 680)
Impact of New CMHC Rules on Borrowers
Gross/Total Debt Service (GDS/TDS) Ratios
The higher debt service ratio requirements will allow more borrowers to participate with higher leverage and take out larger mortgages relative to their income. 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.
Credit Scores
The lower credit score requirement of 600 (previously 680) will allow borrowers who have missed bill payments or have a limited credit history to participate in the CMHC insurance program and be eligible for a downpayment as low as 5%.
RBC Royal Bank Mortgage Affordability
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:
- Your household income
- Your down payment
- Your monthly debt payments to loans and lines of credit including credit cards, car loans, student loans, and leases.
- The property tax and heating cost of your future house.
If your down payment 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 estimating property taxes and utility costs. It considers property tax and heating costs but not other housing costs such as homeowners insurance and maintenance.
RBC's website suggests keeping the gross debt service (GDS) ratio below the 30% - 32% range and keeping the total debt service (TDS) ratio below the 37% - 40% range. These ratios are much more conservative than those Canada’s national housing agency requires. CMHC requires GDS to be less than 39% and TDS to be less than 44%.
RBC’s mortgage affordability calculator also calculates your mortgage limit using the current qualification rate (stress test rate) and a maximum gross debt service (GDS) ratio of around 32%, and a maximum total debt service (TDS) ratio of about 40% (see the mortgage affordability comparison table below). 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 down payment. For RBC to advance a mortgage, home buyers must have a minimum 5% down payment for homes worth less than $500K. For homes between $500K and $1M, home buyers must have 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% down payment.
Mortgage Affordability Comparison Table for RBC Based on Household Income and Other Debt Payments
| Monthly Income | Monthly Debt Payment | Interest Rate | Affordable Mortgage | Mortgage Payment | Other Housing Costs | GDS | TDS | Stress Test Payment | Stressed GDS/TDS |
|---|---|---|---|---|---|---|---|---|---|
| $5,417 | $0 | 5.54% | $185K | $1,134 | $375 | 28.0% | 28.0% | $1,370 | 32.20% |
| $8,333 | $0 | 5.54% | $312K | $1,913 | $375 | 27.5% | 27.5% | $2,315 | 32.30% |
| $12,500 | $0 | 5.54% | $477K | $2,921 | $500 | 27.4% | 27.4% | $3,535 | 32.30% |
| $5,417 | $500 | 5.54% | $176K | $1,078 | $375 | 26.8% | 36.0% | $1,300 | 40.20% |
| $8,333 | $1,000 | 5.54% | $267K | $1,635 | $375 | 24.1% | 36.1% | $1,975 | 40.20% |
| $12,500 | $1,500 | 5.54% | $400K | $2,451 | $500 | 23.6% | 35.6% | $2,936 | 39.50% |
| The mortgage amount and monthly mortgage payment are calculated using RBC's mortgage affordability calculator. An amortization period of 25 years is assumed. The last column contains either stress test GDS or TDS depending on which one limits the mortgage amount. For scenarios with monthly household incomes of 5,417 and 8,333, we assumed a down payment of $60,000. For scenarios with a $12,500 monthly income, we considered a down payment of $100,000. The down payment was not the factor limiting the house purchase price. | |||||||||
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.
TD Bank Mortgage Affordability
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:
- The location of your future home
- Whether your future home is a detached, attached or condo home
- Your household income
- Your down payment
- Your monthly debt payments to loans and lines of credit including credit cards, car loans, student loans, and leases.
TD mortgage affordability calculator gives a range of home prices you can afford. Your home price, location and property type are used to estimate your potential property taxes, heating costs, required maintenance and, if applicable, condo fees. You can modify these values, but that does not change the calculated home price range.
It asks about your personal expenses and uses that information to tell you about your cash flow after taking out the mortgage, but this information does not factor into calculating your house price range.
Among Canada’s big three banks, TD offers the most sophisticated/complicated mortgage affordability calculator. It draws on square footage data from different Canadian cities and municipal tax rates. In composing the Mortgage Affordability Comparison Table, we have used the upper bound of the limit suggested by TD’s calculator. As a result, GDS and TDS ratios look higher for TD compared with other big banks.
Another factor in determining your mortgage affordability is your down payment. According to TD, home buyers must have a minimum 5% down payment for homes worth less than $500K. For homes between $500K and $1M, home buyers must have 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% down payment.
Mortgage Affordability Comparison Table for TD Based on Household Income and Other Debt Payments
| Monthly Income | Monthly Debt Payment | Interest Rate | Affordable Mortgage | Mortgage Payment | Other Housing Costs | GDS | TDS | Stress Test Payment | Stressed GDS/TDS |
|---|---|---|---|---|---|---|---|---|---|
| $5,417 | $0 | 5.54% | $229K | $1,403 | $611 | 37.2% | 37.2% | $1,695 | 42.60% |
| $8,333 | $0 | 5.54% | $359K | $2,268 | $886 | 37.8% | 37.8% | $3,095 | 43.20% |
| $12,500 | $0 | 5.54% | $537K | $3,383 | $1,347 | 37.8% | 37.8% | $4,052 | 43.20% |
| $5,417 | $500 | 5.54% | $197K | $1,207 | $627 | 33.9% | 43.0% | $1,446 | 47.50% |
| $8,333 | $1,000 | 5.54% | $293K | $1,845 | $746 | 31.1% | 43.1% | $2,211 | 47.50% |
| $12,500 | $1,500 | 5.54% | $438K | $2,759 | $1,137 | 31.2% | 43.2% | $3,240 | 47.50% |
| The mortgage amount and monthly mortgage payment are calculated using TD's mortgage affordability calculator. An amortization period of 25 years is assumed. The last column contains either stress test GDS = TDS for the first three rows and stress test TDS for the last three rows. For scenarios with monthly household incomes of 5,417 and 8,333, we assumed a down payment of $60,000. For the scenario with a $12,500 monthly income, we considered a down payment of $100,000. The down payment was not the factor limiting the house purchase price. | |||||||||
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.
Scotiabank Mortgage Affordability
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:
- Your household income
- Your property taxes
- Any applicable condo fees and heating costs
- Your monthly debt payments to loans and lines of credit including credit cards, car loans, student loans, and leases.
Scotia’s mortgage affordability calculator does not consider other housing costs such as homeowner’s insurance and maintenance.
If we look, for example, at the table of 5-year fixed mortgage rates, we see that Scotiabank is advertising the highest mortgage rates among Canadian lenders. The Scotia affordability calculator uses a rate 1% below the advertised Scotiabank rate. This might suggest the available scope for Scotia to offer a discount on their advertised rate.
Scotiabank's mortgage affordability calculator does not take into account your down payment. Instead, it asks if you want to purchase mortgage default insurance or not; it finds your maximum mortgage limit and calculates your minimum down payment for a home with that amount of mortgage depending on whether you have default insurance or not.
Based on the Mortgage Affordability Comparison Table, Scotiabank calculates your mortgage limit using the current rate and a maximum gross debt service (GDS) ratio of 32% and a maximum total debt service (TDS) ratio of 40%. These ratios are exactly what Scotiabank emphasizes on its website.
Thus, your mortgage payment, property tax, heating costs, and half of your condo fees (if applicable) cannot take up more than 32% of your gross income. In addition, this amount, plus your total debt payments, cannot take up more than 40% of your gross income. These criteria approximately translate into a stress test GDS between 37% and 38% and a stress test TDS ratio of 45%.
Another factor in determining your mortgage affordability is your down payment. For Scotiabank to advance a mortgage, home buyers must have a minimum 5% down payment for homes worth less than $500K. For homes between $500K and $1M, home buyers must have 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% down payment.
Mortgage Affordability Comparison Table for Scotiabank Based on Household Income and Other Debt Payments
| Monthly Income | Monthly Debt Payment | Interest Rate | Affordable Mortgage | Mortgage Payment | Other Housing Costs | GDS | TDS | Stress Test Payment | Stressed GDS/TDS |
|---|---|---|---|---|---|---|---|---|---|
| $5,417 | $0 | 5.34% | $226K | $1,358 | $375 | 32.0% | 32.0% | $1,631 | 37.00% |
| $8,333 | $0 | 5.34% | $381K | $2,292 | $375 | 32.0% | 32.0% | $2,749 | 37.50% |
| $12,500 | $0 | 5.34% | $582K | $3,498 | $500 | 32.0% | 32.0% | $4,199 | 37.60% |
| $5,417 | $500 | 5.34% | $215K | $1,292 | $375 | 30.8% | 40.0% | $1,551 | 44.80% |
| $8,333 | $1,000 | 5.34% | $326K | $1,958 | $375 | 28.0% | 40.0% | $2,350 | 44.70% |
| $12,500 | $1,500 | 5.34% | $499K | $3,000 | $500 | 28.0% | 40.0% | $3,600 | 44.80% |
| The mortgage amount and monthly mortgage payment are calculated using Scotiabank's mortgage affordability calculator. An amortization period of 25 years is assumed. The last column contains either stress test GDS or TDS depending on which one limits the mortgage amount. For scenarios with monthly household incomes of 5,417 and 8,333, we assumed a down payment of $60,000. For the scenario with a $12,500 monthly income, we considered a down payment of $100,000. The down payment was not the factor limiting the house purchase price. | |||||||||
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.
BMO Bank of Montreal Mortgage Affordability
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:
- Your household income
- Your property taxes
- Your heating costs
- Maintenance costs and, if applicable, condo fees
- Your monthly debt payments to loans and lines of credit including credit cards, car loans, student loans, and leases.
Considering mortgage rates offered by the big 6 banks, BMO often offers the lowest mortgage rates, especially for uninsured mortgages. When other conditions are the same, BMO’s lower rate allows you to qualify for a larger mortgage. Another advantage of a BMO mortgage is that BMO offers to hold mortgage rates slightly longer than its peers for prequalified potential borrowers.
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 down payment.
BMO calculates your mortgage limit using the current qualification rate and a maximum gross debt service (GDS) ratio of 39% and a maximum total debt service (TDS) ratio of 44%. This means that your mortgage payment, property tax, heating costs, and half of your condo fees (if applicable) cannot take up more than 39% of your gross income. In addition, this amount plus your total debt payments cannot take up more than 44% of your gross income.
Another factor in determining your mortgage affordability is your down payment. According to BMO, home buyers must have a minimum 5% down payment for homes worth less than $500K. For homes between $500K and $1M, home buyers must have 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% down payment.
Mortgage Affordability Comparison Table for BMO Based on Household Income and Other Debt Payments
| Monthly Income | Monthly Debt Payment | Interest Rate | Affordable Mortgage | Mortgage Payment | Other Housing Costs | GDS | TDS | Stress Test Payment | Stressed GDS/TDS |
|---|---|---|---|---|---|---|---|---|---|
| $5,417 | $0 | 5.18% | $244K | $1,445 | $375 | 33.6% | 33.6% | $1,750 | 39.20% |
| $8,333 | $0 | 5.18% | $404K | $2,391 | $375 | 33.2% | 33.2% | $2,900 | 39.30% |
| $12,500 | $0 | 5.18% | $615K | $3,640 | $500 | 33.0% | 33.0% | $4,410 | 39.30% |
| $5,417 | $500 | 5.18% | $225K | $1,225 | $375 | 29.5% | 38.8% | $1,508 | 44.00% |
| $8,333 | $1,000 | 5.18% | $322K | $1,905 | $375 | 27.4% | 39.4% | $2,274 | 43.80% |
| $12,500 | $1,500 | 5.18% | $492K | $2,911 | $500 | 27.3% | 39.3% | $3,530 | 44.20% |
| The mortgage amount and monthly mortgage payments are calculated using the BMO's mortgage affordability calculator. An amortization period of 25 years is assumed, except in the fourth row, where the BMO affordability calculator used a 30-year amortization. The last column contains either stress test GDS or TDS depending on which one limits the mortgage amount. For scenarios with monthly household incomes of 5,417 and 8,333, we assumed a down payment of $60,000. For the scenario with a $12,500 monthly income, we considered a down payment of $100,000. The down payment was not the factor limiting the house purchase price. | |||||||||
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.
CIBC Mortgage Affordability
Before you get a mortgage from CIBC, it is important to know how CIBC calculates your mortgage affordability. CIBC takes into account the following factors:
- Your household income
- Your down payment
- Your property taxes
- Your heating costs
- Any applicable condo fees
- Your monthly debt payments to loans and lines of credit including credit cards, car loans, student loans, and leases.
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 down payment. Looking at the Mortgage Affordability Comparison Table, CIBC requires an stress test GDS of at most 38% and an stress test TDS of just over 42%.
Another factor in determining your mortgage affordability is your down payment. According to CIBC, home buyers must have a minimum 5% down payment for homes worth less than $500K. For homes between $500K and $1M, home buyers must have 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% down payment.
Mortgage Affordability Comparison Table for CIBC Based on Household Income and Other Debt Payments
| Monthly Income | Monthly Debt Payment | Interest Rate | Affordable Mortgage | Mortgage Payment | Other Housing Costs | GDS | TDS | Stress Test Payment | Stressed GDS/TDS |
|---|---|---|---|---|---|---|---|---|---|
| $5,417 | $0 | 5.54% | $222K | $1,360 | $375 | 32.0% | 32.0% | $1,630 | 37.00% |
| $8,333 | $0 | 5.54% | $380K | $2,328 | $375 | 32.4% | 32.4% | $2,789 | 38.00% |
| $12,500 | $0 | 5.54% | $578K | $3,542 | $500 | 32.3% | 32.3% | $4,243 | 37.90% |
| $5,417 | $500 | 5.54% | $191K | $1,169 | $375 | 28.5% | 37.7% | $1,400 | 42.00% |
| $8,333 | $1,000 | 5.54% | $290K | $1,774 | $375 | 25.8% | 37.8% | $2,125 | 42.00% |
| $12,500 | $1,500 | 5.54% | $455K | $2,788 | $500 | 26.3% | 38.3% | $3,340 | 42.70% |
| The mortgage amount and monthly mortgage payments are calculated using CIBC's mortgage affordability calculator. An amortization period of 25 years is assumed. The last column contains either stress test GDS or TDS depending on which one limits the mortgage amount. For scenarios with monthly household incomes of 5,417 and 8,333, we assumed a down payment of $60,000. For the scenario with a $12,500 monthly income, we considered a down payment of $100,000. The down payment was not the factor limiting the house purchase price. | |||||||||
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.
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- Any analysis or commentary reflects the opinions of WOWA.ca analysts and should not be considered financial advice. Please consult a licensed professional before making any decisions.
- The calculators and content on this page are for general information only. WOWA does not guarantee the accuracy and is not responsible for any consequences of using the calculator.
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- Interest rates are sourced from financial institutions' websites or provided to us directly. Real estate data is sourced from the Canadian Real Estate Association (CREA) and regional boards' websites and documents.