Mortgage Affordability Calculator
Find out how much home you can afford based on your income, debts, and down payment. This calculator uses Canadian lending standards including GDS (Gross Debt Service) and TDS (Total Debt Service) ratios.
Income & Debts
Combined household income before taxes
Car loans, credit cards, student loans, etc.
Mortgage Details
You Can Afford
$350,000
Maximum Home Price
Understanding Mortgage Affordability
When determining how much home you can afford, Canadian lenders use two key ratios: Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. These ratios help ensure you can comfortably afford your mortgage payments along with your other financial obligations.
What is the GDS Ratio?
The Gross Debt Service (GDS) ratio measures the percentage of your gross monthly income that goes toward housing costs. This includes:
- Mortgage principal and interest payments
- Property taxes
- Heating costs
- 50% of condo fees (if applicable)
Most Canadian lenders require a GDS ratio of 32% or less, though some lenders may allow up to 39% for well-qualified borrowers.
What is the TDS Ratio?
The Total Debt Service (TDS) ratio includes all your housing costs plus other debt obligations such as:
- All GDS components listed above
- Credit card payments
- Car loans
- Student loans
- Other personal loans
Most lenders require a TDS ratio of 40% or less, with some allowing up to 44% for strong applicants.
Other Factors Affecting Affordability
Credit Score: A higher credit score (above 700) typically qualifies you for better interest rates and may allow for higher debt ratios.
Down Payment: A down payment of at least 20% eliminates the need for CMHC mortgage insurance, reducing your overall costs. Minimum down payments are 5% for homes under $500,000.
Interest Rates: Lenders often use a stress test rate (the higher of the Bank of Canada's qualifying rate or your contract rate + 2%) to ensure you can afford payments if rates rise.
Employment Stability: Lenders prefer borrowers with stable employment history, typically 2+ years in the same field.
Important Disclaimer
This calculator provides estimates for educational and informational purposes only. Results should not be considered as financial, mortgage, or investment advice. Actual mortgage approval amounts will vary based on lender policies, your complete financial profile, credit score, employment history, and current market conditions.
The calculations use standard GDS (32%) and TDS (40%) ratios, but individual lenders may have different requirements. Always consult with a qualified mortgage broker or financial advisor to determine your actual borrowing capacity.