Home Affordability Calculator.
How it works: This calculator estimates affordability based on standard Canadian lending guidelines (GDSR/TDSR) and the mortgage stress test. Enter your financial details below. All calculations are estimates.
Income & Down Payment
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CO-APPLICANT INFORMATION
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Monthly Expenses & Debts
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Mortgage Preferences
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Monthly Budget Breakdown
This chart shows how the estimated monthly housing costs and other debts fit into your total monthly income.
Affordability Factors Explained
Several factors influence how much home you can afford in Canada:
- Income: Higher annual income generally increases affordability. Both primary and co-applicant income are considered.
- Debts: Existing monthly debt payments (loans, credit cards) reduce the amount available for mortgage payments (affecting TDSR).
- Down Payment: A larger down payment reduces the required loan amount. You can enter this as a fixed dollar amount or a percentage of the purchase price. A down payment of 20% or more avoids the need for mortgage default insurance (which is not calculated here).
- Housing Costs: Estimated property taxes, heating costs, and condo fees (if applicable) are included in the affordability calculation (affecting GDSR & TDSR).
- Interest Rates:
- Contract Rate: Determines your actual estimated monthly payment amount.
- Qualifying Rate (Stress Test): The higher rate used by lenders to calculate your *maximum* loan eligibility, ensuring you can handle potential rate increases. This significantly impacts affordability.
- Amortization Period: A longer period (e.g., 25 vs. 15 years) results in lower monthly payments but more total interest paid. It also affects the maximum loan amount calculated using the qualifying rate.
- Debt Service Ratios (GDSR/TDSR): Lenders use these ratios to assess risk. You can select ‘Standard’ (typically 39%/44%) or a more ‘Conservative’ baseline (e.g., 35%/42%).
- GDSR (Gross Debt Service Ratio): Percentage of gross income needed for housing costs (Principal, Interest, Taxes, Heating + 50% Condo Fees for lender calcs, though this calculator uses 100% for simplicity in PITH).
- TDSR (Total Debt Service Ratio): Percentage of gross income needed for all debt (Housing Costs + Other Debts).
- Co-Applicant: Adding a co-applicant can increase borrowing power by combining incomes, but also adds their debts to the calculation.
Disclaimer: This calculator provides estimates for informational purposes only based on common lending practices. Mortgage default insurance premiums, land transfer taxes, and other closing costs are not included. Your actual affordability may vary. Consult with a qualified mortgage professional for personalized advice and pre-approval.
