Step 1
Set the monthly housing limit
Gross monthly household income is combined with the GDS and TDS assumptions. Property tax, heating, half of condo fees and existing debt payments reduce the mortgage-payment room.
A purchase-price estimate should include more than income
Existing debt, cash needed for closing, property taxes, heating, condominium fees and mortgage default insurance can all affect a home-buying budget. A personalized illustration shows how each of these assumptions changes the estimate.
Important: This estimate cannot check your credit, confirm qualifying income, assess a property or apply a lender’s complete underwriting rules.
🔒 Advisor Illustration Tool
Get your personalized mortgage affordability estimate
This calculator is used by Pankaj Bhatia, PFA, CHS to prepare personalized home-buying estimates. It applies the mortgage stress test, GDS and TDS limits, minimum down payment rules and estimated mortgage-insurance premiums to your income, debts, cash and property costs, and shows the purchase price, mortgage, monthly payment and ownership cost.
Please contact Pankaj Bhatia for an illustration with your own numbers.
Worked example
What $100,000, $150,000 and $200,000 household incomes could support
Each household has $120,000 in cash, keeps $15,000 for closing costs (so $105,000 goes to the down payment), pays $800 a month on other debts and takes a 4.50% contract rate over 25 years. Property tax is $4,000 a year, heating $150 a month and the insurance/maintenance allowance $400 a month, with no condo fees. The stress test qualifies the mortgage at 6.50% (4.50% + 2 points) against 39% GDS and 44% TDS limits.
| Household income | Estimated maximum price | Down payment used | Mortgage incl. insurance | Payment at 4.50% | Monthly ownership cost |
|---|---|---|---|---|---|
| $100,000 | $460,815 | $105,000 (22.8%) | $355,815 (no insurance) | $1,969 | $2,853 |
| $150,000 | $715,590 | $105,000 (14.7%) | $629,519 (incl. $18,928 premium at 3.10%) | $3,484 | $4,368 |
| $200,000 | $976,238 | $105,000 (10.8%) | $898,246 (incl. $27,008 premium at 3.10%) | $4,972 | $5,855 |
In all three cases the debt-service limit, not the cash, sets the ceiling: TDS reaches about 44% at the 6.50% qualifying rate. Cash still changes the price: at $150,000 of income, $60,000 of cash (a $45,000 down payment) supports about $650,307 with a 4.00% insurance premium, while $250,000 of cash supports about $864,519 with no insurance. Mortgage-insurance premiums use CMHC's standard bands; provincial tax on the premium, lender underwriting and insurer eligibility are not included. This is an educational estimate, not a mortgage approval or pre-approval.
How the estimate works
The calculator first limits the mortgage payment using debt-service assumptions, then checks if your available cash can meet the down payment requirements for that price range.
Step 2
Stress-test the mortgage payment
The principal-and-interest payment is calculated at the estimated qualifying rate, using Canadian semi-annual mortgage compounding and the selected amortization.
Step 3
Check down payment and insurance
The model tests the purchase-price range against the cash left after your closing reserve, the minimum down payment bands and an estimated mortgage-insurance premium when applicable.
What counts toward GDS and TDS here?
GDS = (qualifying mortgage payment + property tax + heat + 50% condo fees) ÷ gross monthly income. TDS adds the other monthly debt payments. Lender calculations and accepted income can differ.
What the calculator includes—and what it leaves to you
A purchase-price estimate is only as useful as the costs and assumptions behind it. Review these details before treating the result as a budget.
Included in this estimate
- Gross household income, monthly debts and cash available.
- Closing-cost reserve deducted from down-payment cash.
- Contract rate and qualifying rate, based on the higher of contract + 2% or 5.25%.
- GDS/TDS assumptions, property tax, heating and 50% of condo fees for ratios.
- CMHC standard insurance premium bands; 0.20 percentage-point addition for eligible insured amortizations over 25 years.
- Contract-rate payment and an all-in monthly cost using full condo fees and the home-cost allowance entered.
Not verified or included
- Credit score, documented income, employment history, rental income treatment or lender-specific underwriting.
- Property eligibility, appraisal, down-payment source or insurer approval.
- Provincial sales tax on mortgage-insurance premiums, land-transfer tax, legal, inspection and moving costs. Include these in your closing-cost reserve.
- Utilities beyond heating, repairs beyond your allowance, condo special assessments, rate changes or lender fees.
- Whether any 30-year insured-mortgage eligibility test is met. First-time buyer and new-build selections are only assumptions.
Keep a comfortable buffer. A lender's maximum qualifying amount is not necessarily a comfortable household budget. Leave room for savings, repairs, childcare, transportation, insurance, utilities and changes in income or rates.
Mortgage affordability calculator questions
Does this result mean I can get approved for this mortgage?
No. It is an educational estimate, not an approval or pre-approval. A lender reviews documents, credit, property details, down-payment source, accepted income and its underwriting requirements.
How is the mortgage stress-test rate calculated?
This illustration uses the higher of the contract rate plus 2 percentage points or 5.25%. Federal guidance describes this qualifying-rate test for insured and uninsured mortgages. Your lender confirms the rate that applies to your application.
What down payment do I need in Canada?
For many insured home purchases below $1.5 million, the minimum is 5% on the first $500,000 and 10% on the portion above $500,000. At $1.5 million or more, the minimum is generally 20% down and high-ratio insurance is not available. Lender and insurer conditions also apply.
When is mortgage default insurance required?
A down payment below 20% typically means mortgage loan insurance is required. The premium is based on loan-to-value and may be added to the mortgage. Some provinces charge sales tax on the premium, which cannot be financed into the loan.
Who may qualify for a 30-year insured mortgage?
CMHC Home Start permits up to a 30-year amortization for eligible first-time homebuyers or buyers of qualifying newly built homes, subject to other rules. The extra year can lower the payment but usually increases total interest and may affect the insurance premium.
Why does the calculator use 50% of condo fees?
CMHC's published GDS/TDS guidance includes 50% of condominium fees in the debt-service calculation. The monthly ownership-cost estimate uses the full condo fee because that is the amount paid by the owner.
Does the result include land-transfer tax and closing costs?
No jurisdiction-specific estimate is made. The illustration uses a closing-cost reserve that should include the costs relevant to the property and province, such as land-transfer tax, legal fees and applicable provincial tax on mortgage-insurance premiums.
Why is the lender's result different from this estimate?
Lenders can use different accepted-income calculations, debt-service limits, property expense estimates, insurer rules, credit requirements and underwriting policies. Only the lender can confirm the amount available to you.
Official Canadian references
- Financial Consumer Agency of Canada — Preparing to get a mortgage (stress test and debt-service overview)
- Department of Finance Canada — Insured mortgage price cap and down-payment reforms
- CMHC Purchase — insured purchase eligibility, minimum equity and price limit
- CMHC — Mortgage loan insurance premium information
- CMHC — Calculating GDS and TDS
- CMHC — Home Start and 30-year insured mortgage eligibility