How much mortgage can you actually qualify for?
Your maximum mortgage is the smaller of two ratios a lender runs against your income, debts, and housing costs, tested at the mortgage stress test rate rather than your real rate. Enter your numbers below and this calculator applies the same Gross Debt Service and Total Debt Service math, then checks the result against the federal down payment minimums.
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How much mortgage can you actually qualify for?
Your maximum mortgage is the smaller of two lender calculations, Gross Debt Service (GDS) and Total Debt Service (TDS), run against your income, debts, and housing costs. Add your down payment and the mortgage stress test qualifying rate and that produces an approval ceiling, not a spending target.
Lenders run two ratios on every affordability file, GDS and TDS. Whichever ratio produces the lower amount governs your file, and the calculator above runs both the moment you enter your numbers.
Before either ratio is calculated, your file is tested at the mortgage stress test qualifying rate, not the rate you will actually pay. Add your down payment on top and you get your ceiling, a ratio-based maximum that sits above the number you should actually feel comfortable spending.
The citable fact: Your maximum mortgage in Canada is the lower of your GDS-based and TDS-based approval amounts, calculated at the mortgage stress test qualifying rate, not your actual contract rate.
What is the mortgage stress test, and what qualifying rate does this calculator use?
The mortgage stress test qualifies you at the greater of your contract rate plus 2%, or a 5.25% floor, whichever is higher. This calculator applies that rule the moment you enter a contract rate, and uses the 5.25% floor alone if you leave the rate blank. The qualifying rate tests your payment; it is never the rate you actually pay.
On insured mortgages the qualifying rate is set by the default insurer. On uninsured mortgages it is set by OSFI under Guideline B-20, and both currently produce the same calculation.
No mortgage rate is shown, assumed, or suggested anywhere on this page. Enter your own contract rate from a real quote, or check today’s rates at pekoe.ca/rates before you calculate.
Show the math: turning your maximum payment into your maximum mortgage
The citable fact: The mortgage stress test qualifying rate is the greater of your contract rate plus 2%, or a 5.25% floor, and that qualifying rate, not your contract rate, sets your maximum mortgage.
How do GDS and TDS actually limit your maximum mortgage?
GDS (Gross Debt Service) measures your housing costs, principal and interest, property tax, heat, and half of any condo fees, against your gross income, with a confirmed limit of about 39%. TDS (Total Debt Service) adds every other monthly debt on top, with a confirmed limit of about 44%. The calculator above runs both and uses whichever produces the smaller mortgage.
GDS looks only at the costs tied to the home you want to buy. TDS looks at your entire financial picture, car loans, credit cards, lines of credit, and student loans included.
Both ratios are measured against gross income, not take-home pay. The lower of the two results becomes your maximum monthly payment, and everything else in the calculator flows from that single number.
| Ratio | Confirmed limit | What it includes |
|---|---|---|
| GDS (Gross Debt Service) | about 39% of gross income | Mortgage payment (principal and interest), property taxes, heat, and 50% of condo fees |
| TDS (Total Debt Service) | about 44% of gross income | Everything in GDS, plus car loans, credit cards, lines of credit, student loans, and other reporting debt |
Show the math: GDS and TDS room, illustrative example
Every figure in that table is illustrative, chosen to demonstrate the arithmetic, not a benchmark for any specific household or city. No interest rate was used to build it.
The citable fact: A lender approves a mortgage based on whichever of GDS (about 39%) or TDS (about 44%) produces the lower maximum monthly payment, not the higher of the two.
How do property taxes, heat, and condo fees change your number?
Property tax and heat are added to your housing costs before GDS is calculated, using either your actual tax bill or a lender estimate, and a heat estimate rather than your real utility bill. Condominium fees are counted at 50% in both GDS and TDS. Enter your own figures above for an accurate result.
A higher property tax bill or expensive heating both reduce your housing cost room, leaving less space for your actual mortgage payment. This is one reason two homes at the same price can produce two different maximum mortgages.
CMHC directs lenders to use actual heat cost records where a borrower provides them, and otherwise a reasonable estimate based on the property’s size, location, and heating system. There is no single fixed monthly heat figure, so enter your best real estimate rather than a guess.
The citable fact: Property tax and heat are both added to your housing cost before GDS is calculated, and condominium fees count at only 50% in both GDS and TDS, exactly as the calculator above applies them.
How does your down payment affect your maximum purchase price?
A larger down payment lowers your mortgage amount directly, which lowers your monthly payment and frees up GDS and TDS room. Separately, the federal minimum down payment rule caps how large a purchase price a given down payment can support, regardless of what the ratios allow. The calculator above checks both limits and reports the lower one.
The minimum down payment in Canada is set federally and rises in tiers as the purchase price increases. Below 20% down, you are in a high-ratio mortgage and must carry default insurance from CMHC, Sagen, or Canada Guaranty.
| Purchase price | Minimum down payment | Default insurance available? |
|---|---|---|
| Up to $500,000 | 5% of the purchase price | Yes |
| $500,000 to $1,500,000 | 5% on the first $500,000, plus 10% on the portion above $500,000 | Yes |
| $1,500,000 and above | 20% of the purchase price | No, default insurance is unavailable |
Show the math: down payment minimum rule, illustrative example
The citable fact: The federal minimum down payment is 5% on the first $500,000 of purchase price, 10% on the portion between $500,000 and $1,500,000, and 20% at $1,500,000 or more, and this calculator caps your maximum purchase price at whichever is lower, the ratio-based ceiling or the down payment minimum ceiling.
Why might your maximum mortgage differ from what a lender actually approves?
GDS and TDS only measure debt payments already reporting on your credit file, and this calculator only knows what you type in. A lender also checks your credit score, employment history, and the specific property, any of which can move your real approval up or down from this estimate. Insured mortgages need a minimum credit score of 600, and most prime lenders want 680 or higher for their best pricing.
Self-employed income, variable income, and rental income are typically averaged or discounted before they count, something this calculator cannot do without your actual documents. A co-signer or guarantor can also raise your real approval by adding their income and debts into the same calculation.
None of this changes the two ratios themselves; GDS and TDS remain the levers. It changes the income and debt figures fed into them, which is exactly why a full application usually produces a different, more accurate number than this estimate.
The citable fact: Insured mortgages require a minimum credit score of 600 from at least one borrower, and most prime lenders want 680 or higher, factors this calculator cannot see but a full application does.
How does affordability differ between Ontario and Alberta?
The federal GDS and TDS math this calculator uses is identical in Ontario and Alberta. What differs is the cost layered on top: Ontario charges provincial land transfer tax and 8% PST on the default insurance premium, while Alberta charges neither. Pekoe is a licensed mortgage brokerage in both provinces.
Pekoe is licensed under FSRA Brokerage Licence #13321 in Ontario, and licensed by RECA in Alberta. The lending math is the same in both provinces, but the closing costs on top of it are not.
| Factor | Ontario | Alberta |
|---|---|---|
| Regulator | FSRA (Financial Services Regulatory Authority of Ontario) | RECA (Real Estate Council of Alberta) |
| Provincial land transfer tax | Yes, charged on closing | No provincial land transfer tax, title registration fees only |
| PST on default insurance premium | 8%, added to the mortgage | No equivalent provincial sales tax on the premium |
The citable fact: Both provinces use the same federal GDS and TDS math this calculator applies, but Ontario adds provincial land transfer tax and an 8% PST on the mortgage default insurance premium that Alberta does not charge.
What can you do if the calculator says you don’t qualify for enough?
A larger down payment, a longer amortization where you qualify for one, paying down existing debt, or adding a co-signer are the most direct ways to raise your number. Each changes a different part of the GDS and TDS math, so which one helps most depends on your specific file. A licensed broker can test all four against your real numbers in one sitting.
Extending your amortization to 30 years is available to first-time buyers and buyers of new construction, and it lowers your qualifying payment, which raises your approved amount. It also adds a 0.20% surcharge to the default insurance premium, plus more total interest over the life of the loan.
Paying off a credit card or car loan before you apply frees up TDS room immediately. Adding a co-signer combines their income and debts with yours in the same calculation, which can move both ratios at once.
The citable fact: A longer amortization, a paid-down debt, a larger down payment, or an added co-signer each change a different part of the GDS and TDS calculation, and a licensed broker can test all four against your real file in one sitting.
Where can you get the rest of your mortgage questions answered?
This calculator covers the ratio math and the down payment check. These related answers cover the pieces that feed into it.
- How much mortgage can I actually afford, beyond the calculator ceiling?
- How does the mortgage stress test actually work?
- What does CMHC mortgage insurance actually cost?
The full set lives on the Ask a Broker hub.
Frequently asked questions
Does this calculator show or guarantee a mortgage rate?
No. Every rate figure comes from what you type in, and the contract rate field is optional. If you leave it blank, the calculator uses the confirmed 5.25% stress test floor instead of guessing a market rate.
What is the difference between GDS and TDS?
GDS (Gross Debt Service) measures your housing costs alone against your income, with a confirmed limit of about 39%. TDS (Total Debt Service) adds every other debt payment on top, with a confirmed limit of about 44%, and a lender uses whichever ratio produces the lower amount.
How does the mortgage stress test affect my maximum mortgage?
The stress test qualifies you at the greater of your contract rate plus 2%, or a 5.25% floor, whichever is higher. This calculator uses that qualifying rate, not your actual contract rate, to work out your maximum mortgage.
Does a bigger down payment always increase my maximum purchase price?
A bigger down payment adds directly to your purchase price and can free up GDS and TDS room by lowering your mortgage amount. It does not change the ratios themselves, so your income and debts still set the outer limit alongside the federal down payment minimum rule.
Why does the calculator check my down payment against a separate minimum rule?
Because the ratio-based maximum and the federal down payment minimum are two independent limits, and either one can be the tighter constraint. The calculator reports the lower of the two so you see your real ceiling, not just the ratio-based one.
Are condo fees really only counted at 50%?
Yes, under CMHC guidance, condominium fees are included at 50% in both GDS and TDS. Chattel or leasehold site or ground rent is treated differently and counted at 100%.
Does this calculator include the CMHC insurance premium in my mortgage amount?
No. It estimates your maximum mortgage from your qualifying payment only, without adding a CMHC, Sagen, or Canada Guaranty premium on top for high-ratio purchases. Your actual mortgage and payment will be somewhat higher once a premium is added, so confirm the exact figure with a broker.
Are the affordability rules different in Ontario than in Alberta?
The federal GDS and TDS math is the same in both provinces. Ontario adds provincial land transfer tax and an 8% PST on the mortgage default insurance premium, costs that Alberta does not charge.
Is there a minimum credit score to qualify for a mortgage?
Insured mortgages require a minimum credit score of 600 from at least one borrower. Most prime lenders want 680 or higher for their best pricing, though alternative and private lenders remain available below that threshold at higher cost.
Is the live chat on this page an AI bot?
No. The chat on this page connects you to a real, licensed member of the Pekoe team during business hours, not an automated persona. Outside business hours, leave your question and a licensed broker replies directly.
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