How much house can I actually afford?
There are two different numbers and you need both: the maximum a lender will approve, and the maximum payment you can carry without giving up the rest of your life. Shop at the second one.
Lenders approve you on two ratios. Gross debt service compares your housing costs, meaning mortgage payment, property tax, heat and half of any condo fee, against your gross income. Total debt service adds every other debt payment you have. Both are tested at a qualifying rate higher than your contract rate.
Those ratios do not know that you have childcare, a parent you support, a car that will need replacing, or an intention to keep eating in restaurants. They are a solvency test, not a budget. The number that matters is the monthly payment you would choose if nobody were pressuring you, and the price that follows from it.
Work the calculation in that order: pick the payment, derive the price, then check that a lender will approve it. If the lender's ceiling is higher, that is headroom, not an instruction.
What it depends on
- your gross income and how it is earned
- your existing debt payments
- your down payment and whether the mortgage is insured
- the property's tax bill and condo fees
- the qualifying rate at the time you apply
Answer it with your own numbers
You will need: annual income, monthly debt payments, down payment.
Work out your own maximum, both waysAlso asked as
- What price range should I be looking at?
- How much mortgage can I qualify for?
- What can I afford on my salary?
Next questions
What is the mortgage stress test and how much does it cost me?
You must qualify at a rate higher than the one you will actually pay: the greater of a set minimum qualifying rate and your contract rate plus two percentage points. Your approved amount falls in proportion to how much the higher rate raises the payment, which the calculator will show you exactly.
Canada-wide
How much do I need for a down payment?
The minimum is tiered: five percent on the first portion of the price, ten percent on the portion above it, and twenty percent once the price passes the insurable cap. The calculator gives you the exact figure for your price.
Canada-wide
Should I buy, or keep renting?
It turns on how long you will stay, because the cost of buying and the cost of selling are each paid once and neither builds equity. This app prices your entry costs from your own price and municipality; what selling costs you depends on what you agree with a brokerage, and no figure here forecasts what the property does in price.
Canada-wide