How Much House Can I Afford in Canada?

Direct answer: In Canada, a quick affordability screen starts with CMHC's 39% GDS and 44% TDS ratios, then applies the mortgage stress test, down payment, property tax, heat, condo fees, existing debts and closing costs. A lender maximum is not the same as a comfortable budget.

Primary sources: CMHC: Calculating GDS and TDS; OSFI: Minimum qualifying rate.

Use the Mortgage Calculator to test purchase price, down payment, CMHC premium, land transfer tax, amortization and stress-test impact.

Affordability formula

Primary sources: CMHC: Calculating GDS and TDS.

GDS = (mortgage payment + property tax + heat + eligible condo fees) / gross monthly income

TDS = (GDS costs + other monthly debt payments) / gross monthly income

CMHC's public debt-service guidance states that GDS must not exceed 39% and TDS must not exceed 44% for insured mortgage qualification.

Ratio	Includes	Common Ceiling
GDS	Mortgage payment, property tax, heat, condo fees where applicable	39%
TDS	GDS costs plus other monthly debt payments	44%

Worked Canadian examples

These simplified examples use a 7.00% qualifying rate, 25-year amortization, Canadian semi-annual compounding, stated property tax and heat, and no CMHC premium. They show the approximate mortgage supported by the payment room, not a lender approval.

Scenario	Payment room	Approx. mortgage	What changed
$100,000 income, no other debt, $500 tax, $150 heat	$2,600/mo	$371,000	GDS is the binding constraint.
$100,000 income, $600 other monthly debt	$2,417/mo	$345,000	TDS reduces borrowing room.
$150,000 income, $500 debt, $700 tax, $200 heat	$3,975/mo	$568,000	Higher income helps, but taxes and debts still matter.

Stress test

Primary sources: OSFI: Minimum qualifying rate.

For uninsured mortgages at federally regulated lenders, OSFI's current minimum qualifying rate is the greater of the mortgage contract rate plus 2% or 5.25%. If the contract rate is 5.00%, the qualifying rate is 7.00%.

Do not forget closing costs

Primary sources: FCAC: Buying a home.

• Land transfer tax: province-specific and sometimes municipal.
• Legal and title costs: vary by transaction.
• Inspection and appraisal: not always required, but worth budgeting.
• CMHC insurance: applies when the down payment is below 20% on eligible insured purchases.

Common mistakes

• Using pre-approval as a target: a lender maximum may leave too little monthly slack.
• Leaving debts out: vehicle loans, credit cards and student loans affect TDS.
• Forgetting ownership costs: maintenance, utilities, insurance and repairs are separate from the mortgage.

Methodology and assumptions

Examples solve for the mortgage payment that fits CMHC GDS/TDS ceilings using the lower of available GDS and TDS payment room. They exclude CMHC premiums, down-payment minimums, lender overlays, credit score, rental income, condo-fee treatment, property-specific underwriting and provincial closing-cost rebates. Verified July 29, 2026.

Sources: CMHC debt-service calculator; CMHC calculating GDS/TDS; OSFI minimum qualifying rate; FCAC buying a home; Interest Act, section 6.