Income Needed To Get A Mortgage In Canada

This Page's Content Was Last Updated: March 16, 2024
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What You Should Know

  • Your mortgage affordability is determined on the basis of your income, estimated monthly housing costs and monthly debt payments.
  • Lenders use debt service ratios to determine whether your income is sufficient to service your monthly mortgage payments.
  • Federally regulated lenders conduct a stress test to check if you will be able to keep up with your mortgage payments if the mortgage rates increase in future.
  • The average value of new mortgage loans in Canada for Q3 of 2023 was $338,522, according to data published by CMHC.
  • As of March 2024, the income required to buy an average home in Canada with the minimum required downpayment is around $152,000.
Best 5-Year Fixed Mortgage Rates in Canada CanadaLeaf
Mortgage Term:
Fixed
Variable

Minimum income required for a $1M mortgage is $232,492

based on an assumed home price of $1,250,000, a downpayment of $250,000, annual property tax of $4,296, monthly heating cost of $200, and monthly car loan payment of $700.

Minimum income required for a $900K mortgage is $211,623

based on an assumed home price of $990,000, a downpayment of $90,000, annual property tax of $3,600, monthly heating cost of $200, and monthly car loan payment of $700.

Minimum income required for a $800K mortgage is $188,803

based on an assumed home price of $880,000, a downpayment of $80,000, annual property tax of $3,204, monthly heating cost of $200, and monthly car loan payment of $700.

Minimum income required for a $700K mortgage is $166,185

based on an assumed home price of $770,000, a downpayment of $70,000, annual property tax of $2,796, monthly heating cost of $200, and monthly car loan payment of $700.

Minimum income required for a $600K mortgage is $145,959

based on an assumed home price of $660,000, a downpayment of $60,000, annual property tax of $2,400, monthly heating cost of $200, and monthly car loan payment of $700.

Minimum income required for a $500K mortgage is $129,823

based on an assumed home price of $550,000, a downpayment of $50,000, annual property tax of $2,004, monthly heating cost of $100, and monthly car loan payment of $700.

Minimum income required for a $400K mortgage is $101,237

based on an assumed home price of $400,000, a downpayment of $40,000, annual property tax of $1,596, monthly heating cost of $100, and monthly car loan payment of $700.

Minimum income required for a $300K mortgage is $87,979

based on an assumed home price of $330,000, a downpayment of $30,000, annual property tax of $1,200, monthly heating cost of $100, and monthly car loan payment of $700.

Minimum income required for a $200K mortgage is $67,289

based on an assumed home price of $220,000, a downpayment of $20,000, annual property tax of $1,800, monthly heating cost of $200, and monthly car loan payment of $700.

Minimum income required for a $100K mortgage is $44,554

based on an assumed home price of $110,000, a downpayment of $10,000, annual property tax of $900, monthly heating cost of $150, and monthly car loan payment of $700.

Your income is one of the many factors that help determine your mortgage affordability. Along with your income, mortgage lenders also consider your monthly debt payments and monthly housing costs to determine how much mortgage you can afford. Basically, the lenders want to ensure that your income is sufficient to cover your mortgage payments along with other debt and housing payments.

Another key factor that affects your mortgage affordability is the ongoing mortgage rates. This is because monthly mortgage payments increase as mortgage rates go up, which reduces affordability. This means that with the same salary, you can qualify for a larger mortgage amount when the mortgage rates are low than when the mortgage rates are high. Read below to find out how different factors affect the income required to get a mortgage in Canada.

Mortgage Affordability in Canadian Provinces

The income requirement to buy an average home in Canada and its provinces and the change in income requirements from October 2022 to October 2023 are as follows:

Annual Income Needed to Buy an Average Home in Canadian Provinces

(October 2022 vs October 2023)

ProvinceAvg. Home Price (Oct 2022)Avg. Home Price (Oct 2023)Change in Home PriceIncome Required (Oct 2022)Income Required (Oct 2023)Change in Income Required
Canada$644,643$656,625+$11,982$152,154$161,754+$9,600
British Columbia$931,525$968,786+$37,261$211,815$229,908+$18,092
Ontario$831,058$855,990+$24,932$190,923$205,262+$14,338
Quebec$444,113$466,319+$22,206$109,815$119,785+$9,969
Alberta$430,000$455,891+$25,891$106,708$117,385+$10,677
Nova Scotia$388,627$419,717+$31,090$97,631$109,046+$11,415
Prince Edward Island$380,961$380,961$0$95,938$100,092+$4,154
Manitoba$337,724$344,478+$6,754$86,462$91,692+$5,231
New Brunswick$267,418$299,508+$32,090$71,015$81,323+$10,308
Saskatchewan$284,857$296,251+$11,394$74,554$80,585+$6,031
Newfoundland and Labrador$287,270$281,525-$5,745$75,385$77,200+$1,815

Note - The calculations are made using BMO’s qualifying rates (Stress Test Rates) in October 2022 and October 2023.

Assumptions - It is assumed that the minimum required downpayment is paid in each case. The housing costs apart from mortgage payments (property taxes + heating costs + ½ of condo fees) are assumed to be $4,800 / year, irrespective of the location. It is assumed that there are no other monthly loan payments, such as car loans, credit card debt, lines of credit etc.

Mortgage Affordability in Major Canadian Cities

The income requirement to buy an average home in major Canadian cities as of October 2023 is as follows:

Annual Income Needed to Buy an Average Home in Major Canadian Cities

(October 2023)

CityAvg. Home PriceMonthly Mortgage PaymentMonthly Property TaxRequired Annual Income
Toronto$1,125,928$6,669$331$220,003
Vancouver$1,299,503$7,697$279$250,036
Montreal$578,399$4,094$343$141,133
Calgary$545,746$3,840$301$132,021
Edmonton$396,550$2,802$292$99,818
Ottawa$660,836$4,610$351$157,249
Quebec City$377,911$2,694$348$98,208
Winnipeg$369,325$2,667$337$97,038
Hamilton$789,040$5,469$342$183,403
London$629,605$4,401$268$148,274
Kitchener-Waterloo-Cambridge$767,848$5,327$327$178,590
Halifax-Dartmouth$531,129$3,758$494$135,431
Oshawa$804,047$5,569$426$189,062
Saskatoon$385,765$2,738$556$105,982
Victoria$958,161$6,601$327$217,790

Note - The calculations are made using the lowest qualifying rate in each city in November 2023 (Lowest rate + 2%). The property taxes are calculated using WOWA’s property tax calculators for each city and the property’s fair market value.

Assumptions - It is assumed that the minimum required downpayment is paid in each case. The monthly heating cost is assumed to be $150. It is assumed that no condo or HOA fees are required to be paid. It is assumed that there are no other monthly loan payments, such as car loans, credit card debt, lines of credit etc.

Annual Income Needed to Buy an Average Detached Home in Major Canadian Cities

(October 2023)

CityAvg. Home PriceMonthly Mortgage PaymentMonthly Property TaxRequired Annual Income
Toronto$1,450,112$8,589$400$282,738
Vancouver$2,236,349$13,246$500$429,113
Montreal*$545,000$3,868$323$135,110
Calgary$725,758$5,045$400$173,687
Edmonton$486,751$3,440$359$123,031
Ottawa$810,319$5,611$430$192,026
Quebec City*$350,000$2,495$321$92,810
Winnipeg$399,017$2,882$364$106,026
Hamilton$870,085$6,011$377$202,697
London$678,821$4,731$289$160,613

*Median Price

Note - The calculations are made using the lowest qualifying rate in each city in November 2023 (Lowest rate + 2%). The property taxes are calculated using WOWA’s property tax calculators for each city and the property’s fair market value.

Assumptions - It is assumed that the minimum required downpayment is paid in each case. The monthly heating cost is assumed to be $200. It is assumed that no condo or HOA fees are required to be paid. It is assumed that there are no other monthly loan payments, such as car loans, credit card debt, lines of credit etc.

Annual Income Needed to Buy an Average Condo Home in Major Canadian Cities

(October 2023)

CityAvg. Home PriceMonthly Mortgage PaymentMonthly Property TaxRequired Annual Income
Toronto$708,780$4,932$204$167,246
Vancouver$810,944$5,615$174$187,362
Montreal*$390,000$2,780$216$101,421
Calgary$321,641$2,273$186$84,897
Edmonton$203,663$1,439$152$58,182
Ottawa$465,568$3,290$299$119,649
Quebec City*$249,000$1,775$229$70,897
Winnipeg$259,127$1,871$252$74,546
Hamilton$495,705$3,503$215$123,618
London$349,860$2,473$149$89,905

*Median Price

Note - The calculations are made using the lowest qualifying rate in each city in November 2023 (Lowest rate + 2%). The property taxes are calculated using WOWA’s property tax calculators for each city and the property’s fair market value.

Assumptions - It is assumed that the minimum required downpayment is paid in each case. The monthly heating cost is assumed to be $100. It is assumed that the monthly condo fee is $400. It is assumed that there are no other monthly loan payments, such as car loans, credit card debt, lines of credit etc.

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Select: Term
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How do Lenders Determine Your Mortgage Affordability?

To determine how much mortgage you can really afford, mortgage lenders compare your income with your debt payments using debt service ratios. The debt service ratios are also used during a mortgage stress test to determine whether you’ll be able to afford mortgage payments even if mortgage rates go up.

Debt Service Ratios

Mortgage lenders use two debt service ratios to determine your capacity to service mortgage payments – Gross Debt Service (GDS) and Total Debt Service (TDS). These ratios determine how much of your income will go towards paying for your housing costs and making debt payments. The maximum permissible GDS and TDS ratios vary from lender to lender based on their risk tolerance; however, Canada Mortgage and Housing Corporation (CMHC) has set a maximum limit for these ratios for insured mortgages. The lower your debt service ratios are, the better your chances of mortgage approval.

  • GDS Ratio - The GDS Ratio is the ratio of your housing costs to your household’s gross income. The housing costs include mortgage payments, property taxes, heating costs, 50% of condo fees / HOA fees (if applicable) and site/land rent. For CMHC-insured mortgages, this ratio must be less than 39%.
  • TDS Ratio - The TDS Ratio is the ratio of your housing costs and debt payments to your household’s gross income. The debt payments include credit card debt payments, car loan payments/lease payments, line of credit debt and any other loan payments. For CMHC-insured mortgages, this ratio should be less than 44%.

Example of GDS and TDS

Let us assume that a person wants to get a $400,000 mortgage, to buy a condo worth $500,000 in Toronto, and the mortgage rate is 5%. Then, for an amortization of 25 years, the monthly mortgage payment is $2,326. In this case, the monthly costs are as follows:

Housing Costs -

Mortgage Payments$2,326
Property taxes$150
Heating$100
50% of Condo fees$250
Total Housing Costs$2,826

Debt Payments -

Car Loan / Lease Payments$600
Credit Card Debt$0
Line of Credit$500
Other Loans$0
Total Debt Payments$1,100

Assuming that the household makes $100,000, the gross monthly income comes to $8,333.

Then,

Stress Test

All federally regulated mortgage lenders require you to pass the mortgage stress test to determine whether your income is enough to keep up with mortgage payments if the interest rates were to increase in future. A qualifying rate, also called a stress test rate, is used for qualification to ensure that you will still be able to afford the mortgage payments if the mortgage rates increase. The qualifying rate is the higher of -

  • the benchmark rate of 5.25%, and
  • the current mortgage rate plus 2%.

Your income needs to be high enough so that the debt service ratios do not exceed the maximum limits required by the lenders. This means that for CMHC-insured mortgages, the GDS ratio must not exceed 39%, and the TDS ratio must not exceed 44%, even with the qualifying rate.

Credit unions, private lenders and b-lenders aren’t required to conduct a stress test and may be a good option for homebuyers who have failed a stress test or are looking to avoid one.

Best 5-Year Fixed Mortgage Rates in Canada CanadaLeaf
Mortgage Term:
Fixed
Variable

Income and Downpayment

If you fail to qualify for a mortgage based on your current income, one of the ways to qualify is to pay a higher down payment. This is because paying a higher downpayment will reduce your mortgage amount and, in turn, your mortgage payments. Your current income may not be enough for the mortgage amount you originally wanted, but you could qualify for a lower mortgage amount.

You could consider withdrawing from your RRSP (Registered Retirement Savings Plan) or your TFSA (Tax-Free Savings Account) to increase your downpayment. Some people also choose to borrow from their parents or other close relatives to increase their downpayment. You can also check out downpayment assistance programs available in your province. If you plan to buy a home in a few years, you could start saving for a downpayment with an FHSA (First Home Savings Account)

To get an estimate of how much mortgage you will qualify for based on your unique situation, you can get a mortgage pre-approval.

Income Needed to Qualify for Different Mortgage Amounts

The income needed to get a mortgage of a particular amount can vary based on many factors, and every case is unique. However, we have made calculations below based on some assumptions to help you understand how lenders decide whether your income is sufficient to qualify for a mortgage. The qualifying rate used for the stress test is used for calculations, as the mortgage applicant will have to pass the stress test to qualify for a mortgage.

Suppose you want to buy a $1,250,000 house in Toronto. To buy a home with a price over 1M in Canada, you are required to put down at least a 20% downpayment. In this case, you will have to pay $250,000 as the downpayment, and you can get a $1,000,000 mortgage. This mortgage cannot be insured by CMHC, and uninsurable mortgage rates will be applicable.

FactorValueAssumption / Description
Home Purchase Price$1,250,000Assumed purchase price of home
Downpayment$250,00020% of home price
Mortgage Amount$1,000,000Home price minus downpayment
CMHC Insurance Premium$0As the home value is over $1M, the mortgage is not insurable
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.99%The best available 5-year uninsurable fixed mortgage rate
Qualifying Rate / Stress Test Rate6.99%Higher of 5.25% and current 5-year fixed uninsurable mortgage rate + 2%
Monthly Mortgage Payment$6,998Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$358Based on the assumed property tax of $4,296 per year
Heating Costs$200Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$7,556Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$19,374Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$232,492Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$18,764Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$225,163Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$232,492Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $1,000,000 mortgage in this particular case is $232,492. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $990,000 house in Toronto, of which you are paying $90,000 as a downpayment and require a $900,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$990,000Assumed purchase price of home
Downpayment$90,000Assumed downpayment
Mortgage Amount$900,000Home price minus downpayment
CMHC Insurance Premium$36,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$6,378Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$300Based on the assumed property tax of $3,600 per year
Heating Costs$200Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$6,878Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$17,635Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$211,623Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$17,222Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$206,666Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$211,623Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $900,000 mortgage in this particular case is $211,623. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $880,000 house in Toronto, of which you are paying $80,000 as a downpayment and require a $800,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$880,000Assumed purchase price of home
Downpayment$80,000Assumed downpayment
Mortgage Amount$800,000Home price minus downpayment
CMHC Insurance Premium$32,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$5,669Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$267Based on the assumed property tax of $3,204 per year
Heating Costs$200Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$6,136Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$15,734Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$188,803Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$15,537Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$186,439Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$188,803Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $800,000 mortgage in this particular case is $188,803. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $770,000 house in Toronto, of which you are paying $70,000 as a downpayment and require a $700,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$770,000Assumed purchase price of home
Downpayment$70,000Assumed downpayment
Mortgage Amount$700,000Home price minus downpayment
CMHC Insurance Premium$28,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$4,960Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$233Based on the assumed property tax of $2,796 per year
Heating Costs$200Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$5,393Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$13,829Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$165,953Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$13,849Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$166,185Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$166,185Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $700,000 mortgage in this particular case is $166,185. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $660,000 house in Toronto, of which you are paying $60,000 as a downpayment and require a $600,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$660,000Assumed purchase price of home
Downpayment$60,000Assumed downpayment
Mortgage Amount$600,000Home price minus downpayment
CMHC Insurance Premium$24,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$4,252Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$200Based on the assumed property tax of $2,400 per year
Heating Costs$200Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$4,652Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$11,928Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$143,133Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$12,163Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$145,959Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$145,959Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $600,000 mortgage in this particular case is $145,959. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $550,000 house in Toronto, of which you are paying $50,000 as a downpayment and require a $500,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$550,000Assumed purchase price of home
Downpayment$50,000Assumed downpayment
Mortgage Amount$500,000Home price minus downpayment
CMHC Insurance Premium$20,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$3,543Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$167Based on the assumed property tax of $2,004 per year
Heating Costs$100Assumed monthly heating cost
50% of Condo / HOA Fees$250Assuming that the condo fee is $500 per month
Total Monthly Housing Cost$4,060Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$10,411Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$124,929Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$10,819Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$129,823Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$129,823Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $500,000 mortgage in this particular case is $129,823. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $400,000 house in Toronto, of which you are paying $40,000 as a downpayment and require a $360,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$400,000Assumed purchase price of home
Downpayment$40,000Assumed downpayment
Mortgage Amount$360,000Home price minus downpayment
CMHC Insurance Premium$11,1604% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$2,529Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$133Based on the assumed property tax of $1,596 per year
Heating Costs$100Assumed monthly heating cost
50% of Condo / HOA Fees$250Assuming that the condo fee is $500 per month
Total Monthly Housing Cost$3,012Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$7,723Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$92,678Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$8,436Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$101,237Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$101,237Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $360,000 mortgage in this particular case is $101,237. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $330,000 house in Toronto, of which you are paying $30,000 as a downpayment and require a $300,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$330,000Assumed purchase price of home
Downpayment$30,000Assumed downpayment
Mortgage Amount$300,000Home price minus downpayment
CMHC Insurance Premium$12,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$2,126Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$100Based on the assumed property tax of $1,200 per year
Heating Costs$100Assumed monthly heating cost
50% of Condo / HOA Fees$200Assuming that the condo fee is $400 per month
Total Monthly Housing Cost$2,526Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$6,477Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$77,720Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$7,332Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$87,979Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$87,979Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $300,000 mortgage in this particular case is $87,979. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $220,000 house in Toronto, of which you are paying $20,000 as a downpayment and require a $200,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$220,000Assumed purchase price of home
Downpayment$20,000Assumed downpayment
Mortgage Amount$200,000Home price minus downpayment
CMHC Insurance Premium$8,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$1,417Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$150Based on the assumed property tax of $1,800 per year
Heating Costs$200Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$1,767Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$4,531Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$54,378Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$5,607Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$67,289Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$67,289Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $200,000 mortgage in this particular case is $67,289. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Suppose you want to buy a $110,000 house in Toronto, of which you are paying $10,000 as a downpayment and require a $100,000 mortgage to cover the rest. The mortgage will be insured by CMHC, and the following calculations will apply:

FactorValueAssumption / Description
Home Purchase Price$110,000Assumed purchase price of home
Downpayment$10,000Assumed downpayment
Mortgage Amount$100,000Home price minus downpayment
CMHC Insurance Premium$4,0004% of the mortgage amount that needs to be paid back to the lender with the mortgage
Amortization 25 yearsMaximum amortization for a CMHC-insured mortgage
5-year fixed mortgage rate4.69%The best available 5-year insured fixed mortgage rate
Qualifying Rate / Stress Test Rate6.69%Higher of 5.25% and current 5-year fixed insured mortgage rate + 2%
Monthly Mortgage Payment$709Monthly mortgage payments, including CMHC premium, based on the qualifying rate
Monthly Property Tax Payment$75Based on the assumed property tax of $900 per year
Heating Costs$150Assumed monthly heating cost
50% of Condo / HOA Fees$0Assuming that the home is not a part of a condo / HOA Association
Total Monthly Housing Cost$934Monthly mortgage payment + Property taxes + Heating cost + 50% of condo fees
Monthly Household Income Requirement based on GDS$2,394Based on a maximum GDS of 39%
Annual Household Income Requirement based on GDS$28,727Monthly household income requirement based on GDS x 12
Monthly Car Loan Payment$700Assumed monthly car loan payment
Other Debt Payment$0Assuming there is no other debt, such as credit card debt, line of credit, etc.
Total Debt Payment$700Car loan payments + Credit card debt payments + Line of credit payments + Other debt payments
Monthly Household Income Requirement based on TDS$3,713Based on a maximum TDS of 44%
Annual Household Income Requirement based on TDS$44,554Monthly household income requirement based on TDS x 12
Minimum Annual Household Income Requirement$44,554Greater of household income requirement based on GDS and household income requirement based on TDS.

From the above calculations, we can conclude that the minimum income required for a $100,000 mortgage in this particular case is $44,554. The income requirement for the same mortgage amount can vary based on your housing costs, debt payments, downpayment and other such factors.

Different Income Requirements for the Same Mortgage Amount

Case 1: Different Amortization Periods

Let us compare two scenarios where the mortgage amount is the same, but other parameters differ.

ParameterHouse 1House 2House 3
House Price$500,000$500,000$500,000
Downpayment$100,000$100,000$100,000
Mortgage Amount$400,000$400,000$400,000
Amortization25 years30 years35 years
Mortgage Rate5.54% (Best rate for insurable mortgages for LTV of 80% as of Nov 22, 2023)5.64% (Best rate for uninsurable mortgages as Nov 22, 2023)5.64% (Best rate for uninsurable mortgages as Nov 22, 2023)
Qualifying Mortgage Rate7.54%7.64%7.64%
Monthly Mortgage Payment$2,936$2,803$2,703
Monthly Property Tax$150$150$150
Monthly Heating Cost$200$200$200
Total Monthly Housing Cost$3,286$3,153$3,053
Minimum Annual Income based on GDS of 39%$101,108$97,015$93,938
Total Interest Paid$480,880$608,953$735,264

In the above example, house 1 has a standard amortization period of 25 years and house 2 has an amortization period of 30 year and house 3 has an amortization period of 35 years. It is evident that increasing the amortization period can decrease the income requirement. However, the total interest paid increases significantly with increasing amortization.

Case 2: Different Home Values

Let us compare two scenarios where the mortgage amount is the same, but the home values differ, changing other parameters as well.

ParameterHouse 1House 2
House Price$1,200,000$770,000
Downpayment$500,000$70,000
Mortgage Amount$700,000$700,000
Mortgage Rate5.64% (Best rate for uninsurable mortgages as Nov 22, 2023)5.24% (Best rate for insured mortgages as of Nov 22, 2023)
Qualifying Mortgage Rate7.64%7.24%
Monthly Mortgage Payment$5,183$5,207 (Including CMHC premium)
Monthly Property Tax$350$233
Monthly Heating Cost$250$200
Total Monthly Housing Cost$5,833$5,640
Minimum Annual Income based on GDS of 39%$181,015$173,538

In the above example, house 1 has a greater price than house 1, but the mortgage amount for both of them is the same. Assuming that the two houses are located in the same locality, it is likely that house 1 is bigger than house 2 and will have a higher property tax and heating cost. Meanwhile, the monthly mortgage payment of house 2 is higher despite the mortgage rate being lower, as it includes CMHC premium payments as well. It is evident from the above example that even though the mortgage amount is the same, the minimum income requirement for both homes is slightly different based on different factors.

Case 3: Different Debt Payments

Another example is where the mortgage amount is the same, and the housing costs are the same, but the debt payment amount is different. Let us compare the two scenarios below:

ParameterBuyer 1Buyer 2
House Price$770,000$770,000
Mortgage Amount$700,000$700,000
Qualifying Mortgage Rate7.24%7.24%
Monthly Mortgage Payment$5,207$5,207
Other Monthly Housing Costs$433$433
Total Monthly Housing Cost$5,640$5,640
Monthly Debt Payment (Car Loan + Credit Card Debt + Other Loans)$1,000$0
Minimum Annual Income based on GDS$173,538$173,538
Minimum Annual Income based on TDS of 44%$181,091$173,538

In the above scenario, both buyer 1 and 2 purchase similar homes with the same home price and mortgage amount in the same locality. However, buyer 1 has to make monthly payments for other debt, while buyer 2 does not have any other debt. Due to this, buyer 1 has a higher income requirement for the same mortgage amount.

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