How much house can you afford?

The two debt-service tests behind every Canadian mortgage approval. CMHC states it "restricts debt service ratios to 39% (GDS) and 44% (TDS)." GDS (gross debt service) is your housing load: mortgage principal and interest, property taxes, heat, and — per CMHC — "50% of the condominium fees." TDS (total debt service) adds every other debt payment: car loans, lines of credit, support payments, and unsecured revolving credit counted at no less than 3% of the balance per month. Whichever ratio you hit first sets your ceiling.

Because the lender does. The federal stress test makes you qualify at "the greater of the mortgage contract rate plus 2% or 5.25%" — so at today's ~4.85% market rates you must prove your income covers the payment at 6.85%, even though you'll pay the lower one. That single rule trims maximum borrowing power by roughly 15–20%. Our stress-test calculator isolates exactly that gap.

5% of the first $500,000 of the purchase price, 10% of the portion between $500,000 and $1.5 million, and 20% from $1.5 million up — because mortgage default insurance is only available below that price cap (raised from $1M on December 15, 2024). On an $800,000 home that's $25,000 + $30,000 = $55,000 minimum. This calculator enforces the tiers automatically.

CMHC's premium runs from 0.60% of the loan at 65% loan-to-value up to 4.00% at 95% LTV, plus a 0.20-point surcharge if you take a 30-year insured amortization. The premium is added to your mortgage and amortized with it — but the provincial sales tax on it is not: Ontario charges 8% RST on the premium, due in cash at closing. On a $500,000 loan at 95% LTV that's a $20,000 premium and $1,600 of tax.

With less than 20% down: only first-time buyers and buyers of new builds, under the December 15, 2024 federal expansion. CMHC's first-time definition is broader than people assume — never owned, or not occupied a home you owned as your principal residence in the current and four preceding calendar years, or recently separated from a marriage or common-law relationship. "Newly built" means never previously occupied. With 20%+ down, amortization is between you and your lender — 30 years is routine.

No — it's the insurer-rule ceiling, which is the right planning anchor. Real approvals also need a credit score of at least 600 (CMHC minimum; lenders often want more), provable income, and lender-specific policies — some uninsured lenders allow higher ratios, credit unions are provincially regulated and can differ, and rental or self-employment income gets haircut in ways this tool doesn't simulate. Treat the result as your realistic upper bound, then get a pre-approval to confirm it.