How much house can you afford?
See the most house your income and savings can carry under Canadian lending rules: the 39% and 44% debt ratios at the stress-test rate, tiered minimum down payments, and the 2026 insured-mortgage limits. It also shows the gap between the payment lenders test you on and the one you would actually make.
Your maximum purchase price
$607,668
Above this price, housing costs at the qualifying rate would pass 39% of your gross income. With $41,560 down (6.8%), the mortgage would be $588,752 including the CMHC premium.
Lenders test you at 6.5%: $3,944 a month. At your 4.5% rate you would actually pay $3,259.
The three limits
- Housing costs (GDS 39%) (the limit)
- $607,668
- Housing plus debts (TDS 44%)
- $680,936
- Cash for down payment and closing
- $654,663
The lowest of the three is your maximum. Each is worked out separately, so you can see how far the others are.
The qualifying rate is not the paying rate
Qualifying payment at 6.5%
$3,944
What GDS and TDS are tested on: the higher of your rate plus 2 points and 5.25%.
Your real payment at 4.5%
$3,259
$685 a month less than the test payment. 25 years, Canadian semi-annual compounding.
The breakdown at your maximum
| Gross income per month | $11,667 |
|---|---|
| Mortgage payment at 6.5% | $3,944 |
| Property tax | $506 |
| Heating | $100 |
| Housing costs: GDS 39% (cap 39%) | $4,550 |
| Other debt payments | $0 |
| Housing plus debts: TDS 39% (cap 44%) | $4,550 |
| Purchase price | $607,668 |
|---|---|
| Down payment (6.8% of the price) | $41,560 |
| Minimum down payment at this price (5.9%) | $35,767 |
| CMHC premium (4% of the loan, added to the mortgage) | $22,644 |
| Mortgage | $588,752 |
| Land transfer tax after $4,000 first-time rebate | $4,628 |
| Sales tax on the CMHC premium (cash) | $1,812 |
| Legal and other fees | $2,000 |
| Cash needed: down payment plus closing | $50,000 |
The minimum down payment is 5% of the first $500,000 and 10% of the rest up to $1,500,000. At this price that is 5.9% overall, not 5%.
25 or 30 years?
| 25 years | 30 years | |
|---|---|---|
| Real monthly payment at this price | $3,259 | $2,975 |
| Total interest over the full term | $388,823 | $480,937 |
| Maximum purchase price | $607,668 | $640,671 |
Thirty years lowers the payment and can raise the price you qualify for, but adds 0.20% to the insurance premium and costs more interest overall. Shown at today's rate held for the whole amortization, which real mortgages renew every few years.
Notes on your numbers
- Many lenders run tighter limits, around 32% GDS and 40% TDS. 39%/44% is the insured ceiling, not a target, and a pre-approval is the only real number.
- Property tax and heating are rough defaults. Property tax is charged on assessed value at your city's rate; replace both with real figures for the home you are looking at.
An estimate, not a pre-approval: your lender decides. Rules used are dated 2026-09-27: GDS 39% and TDS 44% insured ceilings, the stress test, the $1,500,000 insured price cap and 30-year insured amortization for first-time buyers and new builds.
How the math works
- Three limits, the lowest wins. Housing costs up to 39% of gross income (GDS), housing plus other debt payments up to 44% (TDS), and enough cash for the minimum down payment plus closing costs.
- Housing costs are the mortgage payment at the qualifying rate, property tax, heating, and half of any condo fees.
- The stress test: lenders qualify you at the higher of your rate plus 2 points and 5.25%. Your real payment uses your own rate. Payments use Canadian semi-annual compounding.
- Minimum down payment: 5% of the first $500,000 and 10% of the rest, up to $1.5 million. Above $1.5 million, insurance is not available and 20% of the whole price is required.
- CMHC premium (4.00%, 3.10% or 2.80% of the loan, plus 0.20% for 30 years) is added to the mortgage and included in the payment lenders test. Sales tax on the premium is paid in cash in Ontario, Quebec, Manitoba and Saskatchewan.
- Cash covers closing costs first: land transfer tax after first-time buyer rebates (Ontario, Toronto and BC are calculated), sales tax on the premium, and legal fees. The rest is your down payment.
- Not included: moving costs, inspections, credit score checks (the 39%/44% ceilings assume a score of 680 or more), and each lender's own rules. Many lenders run tighter limits.
Sources and dates
- Gross Debt Service (GDS) ratio ceiling: www.cmhc-schl.gc.ca, checked 2026-09-27
- Total Debt Service (TDS) ratio ceiling: www.cmhc-schl.gc.ca, checked 2026-09-27
- OSFI minimum qualifying rate (stress test): www.osfi-bsif.gc.ca, checked 2026-09-27
- Minimum down payment tiers (federal, Dec 15, 2024): www.canada.ca, checked 2026-09-27
- CMHC mortgage insurance premiums (% of mortgage): www.cmhc-schl.gc.ca, checked 2026-09-27
- Insured mortgage amortization rules: www.canada.ca, checked 2026-09-27
- Canadian semi-annual compounding conversion: www.osfi-bsif.gc.ca, checked 2026-09-27
- Insured mortgage price cap (Dec 2024 reform): www.canada.ca, checked 2026-09-29
- Ontario land transfer tax tiers (2026): www.ontario.ca, checked 2026-09-27
- Ontario first-time home buyer LTT rebate maximum: homefind.ca, checked 2026-09-29
- Toronto MLTT brackets up to $3M (1-2 single-family residences): wowa.ca, checked 2026-09-29
- Toronto first-time buyer MLTT rebate maximum: homefind.ca, checked 2026-09-29
- BC property transfer tax general brackets: www.paxlaw.ca, checked 2026-09-29
- BC First Time Home Buyers' Program: price thresholds: www2.gov.bc.ca, checked 2026-09-29
- Illustrative mortgage contract rate (planner default): internal design default, checked 2026-09-30assumption