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Mortgage Affordability Calculator

Find out how much mortgage you can qualify for based on your income, debts and the stress test.

2026 Tax YearData stays on your deviceUpdated Apr 1, 2026
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Maximum Home Price

$455,579.31

Maximum Mortgage

$405,579.31

GDS Ratio

6.40%

Limit: 39% — PASS

TDS Ratio

12.40%

Limit: 44% — PASS

Stress Test Rate

6.50%

Higher of 4.5% + 2% = 6.50% or 5.25%

You likely qualify for this mortgage amount under the stress test.

Mortgage Qualification in Canada

Qualifying for a mortgage in Canada involves two key debt-service ratios and a mandatory stress test. The Gross Debt Service (GDS) ratio measures your housing costs — mortgage payment, property taxes, heating, and 50% of condo fees if applicable — as a percentage of your gross household income. The maximum GDS is typically 39%. The Total Debt Service (TDS) ratio adds all other monthly debt obligations (car loans, student loans, credit card minimum payments, lines of credit) to the GDS numerator. The maximum TDS is 44%. Both ratios must be satisfied simultaneously.

The stress test, mandated by OSFI’s B-20 guidelines for all federally regulated lenders, requires you to qualify at the higher of your actual contract rate plus 2% or the Bank of Canada’s benchmark rate (currently 5.25%). This means that even if you negotiate a 4.5% rate, the lender must verify that you could afford payments at 6.5%. The stress test was introduced to protect borrowers and the financial system from the risk of rising interest rates, and it significantly reduces the maximum mortgage amount compared to qualifying at the contract rate alone.

Income verification is a critical part of the process. Salaried employees provide a letter of employment, recent pay stubs, and T4 slips. Hourly, commission, and bonus income typically requires a 2-year history, with lenders averaging the figures. Self-employed borrowers must present 2 years of T1 General tax returns with the Statement of Business Activities, and lenders use the average net income after deductions. Some self-employed borrowers may qualify under alternative (stated income) programs offered by certain lenders, though these come with higher interest rates and down payment requirements.

Understanding these qualification mechanics empowers you to improve your chances of approval. Strategies include paying down existing debts before applying (to reduce your TDS), avoiding new credit inquiries in the months before your application, increasing your down payment to lower the required mortgage amount, and ensuring your income documentation is clean and consistent. If you are near the edge of qualification, even a small reduction in monthly debt payments can meaningfully increase your maximum mortgage.

Frequently Asked Questions

What is the mortgage stress test?
The stress test requires you to qualify at either your contract rate + 2% or 5.25%, whichever is higher. This ensures you can handle higher rates. It applies to all federally regulated lenders.
What are GDS and TDS ratios?
GDS (Gross Debt Service) is your housing costs divided by gross income — max 39%. TDS (Total Debt Service) adds all other debts — max 44%. Both must be satisfied to qualify.
What income counts for mortgage qualification?
Lenders consider stable, verifiable income. Salaried employment income is straightforward. For hourly workers, lenders typically average your income over the last 2 years. Commission income, bonuses, and overtime usually require a 2-year history. Rental income is often included at 50-80% of gross rent.
Do bonuses count toward qualification?
Yes, but typically only if you have a 2-year history of receiving them. Lenders average the last 2 years of bonuses and add a portion (often 50-100%) to your qualifying income. You will need supporting documentation like T4s and a letter from your employer confirming the bonus structure.
What if I am self-employed?
Self-employed borrowers face additional scrutiny. Most lenders require 2 years of business tax returns (T1 Generals with Statement of Business Activities). Your qualifying income is typically your net business income after expenses, averaged over 2 years. Some lenders offer stated-income programs at higher rates for borrowers who cannot show sufficient net income.
Can I include a co-borrower?
Yes. Adding a co-borrower (such as a spouse or partner) combines both incomes for qualification, which can significantly increase your maximum mortgage. However, both borrowers' debts are also combined in the TDS calculation, and both are equally liable for the mortgage.
Does the stress test apply to renewals?
If you renew with your current lender, the stress test does not apply. However, if you switch to a new lender at renewal (to get a better rate), you must pass the stress test at the new lender. This can sometimes prevent borrowers from switching even when better rates are available elsewhere.
What about condo fees?
For condominiums, lenders include 50% of the monthly condo (strata) fees in the GDS calculation along with your mortgage payment, property tax, and heating costs. High condo fees can significantly reduce the mortgage amount you qualify for.

Official Data Sources

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Konstantin IakovlevBuilt and reviewed by Konstantin Iakovlev · Data from CRA, CMHC, Bank of Canada · Methodology

Disclaimer: This calculator provides estimates based on publicly available data from CRA and other government sources. It does not constitute financial advice. Consult a qualified advisor for decisions about your specific situation.

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