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mortgage affordability

What Is a Mortgage Affordability Calculator?

Not sure what price range you should be house hunting in? This Mortgage Affordability Calculator is your go-to tool for figuring out how much home you can comfortably afford based on your income, debts, and down payment. Whether you’re buying solo, with a partner, or planning ahead, this calculator gives you the clarity to set a confident homebuying budget.

With just a few simple inputs, you’ll see a clear estimate of your maximum purchase price — so you can focus on homes within your reach and avoid financial stress down the road.

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).
    Your affordability is limited by whichever ratio is reached first based on the selected limits and the qualifying rate.
  • 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.

What Does a Mortgage Affordability Calculator Do?

A mortgage affordability calculator helps you determine the maximum home price you can qualify for based on your:

  • Total household income
  • Monthly debts (car loans, credit cards, etc.)
  • Down payment amount
  • Mortgage interest rate
  • Amortization period

It automatically applies industry-standard formulas such as your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios — the same way Canadian lenders assess your eligibility. This makes it a realistic preview of what a lender might approve you for.

Who Should Use This Mortgage Affordability Calculator?

This calculator is perfect for:

  • First-time homebuyers
  • Current homeowners planning to upsize/downsize
  • Self-employed buyers
  • Couples purchasing together
  • Anyone with existing debt who wants a clearer picture

Why Use a Mortgage Affordability Calculator Before You Start Home Shopping?

Using this calculator helps you:

  • Avoid wasting time looking at homes outside your budget
  • Set realistic expectations and goals
  • Estimate your mortgage pre-approval amount
  • Plan your down payment strategy
  • Budget for all other homeownership expenses more accurately

Tips to Increase Your Mortgage Affordability

Want to afford more home without overextending yourself? Here are a few smart strategies:

  1. Pay down existing debt – Lower monthly obligations = more room for a mortgage
  2. Improve your credit score – Better credit = better rates
  3. Increase your income – Include co-applicants or side income if allowed
  4. Save for a larger down payment – Reduces the loan amount required
  5. Choose a longer amortization – Spreads payments out over more years

Use the calculator to test each of these changes and see how much your affordability increases.

Pro Tip

If you’re planning to buy in a high-cost market like Toronto or Vancouver, consider using both the Affordability Calculator and the CMHC Insurance Calculator to get a more accurate estimate of your total home-buying costs.

Related Tools and Pages

Trusted External Resources:

These resources provide additional insights into Canadian affordability rules and homeownership strategies.

Knowing your mortgage affordability puts you in the driver’s seat. Don’t guess — calculate it. Avoid disappointment, save time, and plan your homebuying journey with confidence.

Try it now, and explore your options before you sign.