Mortgage affordability calculator

Lenders look at two ratios at the stress test rate: housing costs up to 39% of gross income (GDS) and all debt payments up to 44% (TDS). With $120,000 of household income, $400 a month of other debts, $60,000 down, $350 property tax, $100 heating, a 4.5% rate and 25 years, this calculator estimates a home of about $559,000 and a mortgage of $514,469 including CMHC insurance.

With $100,000 of income, no other debts, $50,000 down, $350 a month of property tax, $100 of heating, a 4.5% rate and a 25-year amortization, the estimate is about $455,000. The mortgage would be $417,555 including CMHC insurance, with a payment of about $2,311 a month at 4.5%. Debts, a lower rate or a bigger down payment change the answer.

With $80,000 of income, no other debts, $40,000 down and the same tax, heating and 4.5% rate assumptions, the estimate is a home of about $351,000 and a mortgage of $320,641 including CMHC insurance. That’s a payment of about $1,775 a month at 4.5%.

GDS (gross debt service) is your mortgage payment, property tax, heating and half of any condo fees, divided by gross monthly income. TDS (total debt service) adds all your other debt payments. CMHC’s limits for insured mortgages are 39% GDS and 44% TDS, and many lenders use similar limits for uninsured loans.

You must qualify at the greater of your contract rate plus 2 points or 5.25%, even though you pay your actual rate. At a 4.5% rate you qualify at 6.5%, which lowers the price you can reach. The payment you actually make is shown separately in the results.

It’s 5% of the first $500,000 of the price and 10% of the portion above that, for homes under $1.5 million. At $1.5 million or more you need 20% because mortgage insurance isn’t available. With under 20% down, the mortgage must be insured and the premium is usually added to the loan.

CMHC’s premium is a percentage of the loan: 4.00% with 5% to 9.99% down, 3.10% with 10% to 14.99% down and 2.80% with 15% to 19.99% down. A 30-year insured amortization adds 0.20 points. Provincial sales tax on the premium in Ontario, Quebec and Saskatchewan is paid upfront and isn’t included here.

With under 20% down, a 30-year amortization is available through CMHC’s Home Start rules if at least one borrower is a first-time buyer or the home is newly built. With 20% or more down, the loan is uninsured and many lenders offer 30 years. A longer amortization raises the price you qualify for but adds interest.

Yes. CMHC’s GDS includes property taxes, heating and 50% of condo fees on top of the mortgage payment. If you don’t know your exact costs, the defaults here are rough placeholders, so replace them with figures for the home or area you’re looking at.

It’s an estimate. Lenders also look at your credit score, income stability, the property and their own policies, and some use lower ratio limits. A pre-approval from a lender or broker gives you a firm number.