A household earning $110,000 with $400 a month in debts and $60,000 saved could expect a pre-approval near $441,794, enough for a home up to about $488,510. Put in your own income, debts and down payment and you get a range for your budget.
What is a mortgage pre-approval?
It’s a lender’s early answer to “how much would you lend me?”, given before you’ve picked a home. It usually comes with a rate hold, and the calculator notes that holds often run 90 to 120 days. Nothing is locked in, though. Once you make an offer, the lender still checks the property and your file.
This estimate starts from your income and works backward. It finds the biggest monthly housing payment your income supports, then turns that payment into a loan at the stress test rate, which is the higher of your expected rate plus 2 points and 5.25%. That’s the same minimum qualifying rate OSFI sets for uninsured mortgages.
How much do income and debts change the answer?
Every row changes one input from the default household. The rest stay put: a 4.99% rate, $60,000 down, $4,000 property tax and $150 heating.
| Change | Maximum mortgage | Home price reached |
|---|---|---|
| Default: $110,000 income, $400 debts | $441,794 | $488,510 |
| Debts rise to $1,000 a month | $364,391 | $413,434 |
| Income rises to $150,000 | $627,562 | $663,425 |
The default household, step by step
The stress test rate here is 6.99%, and the $441,794 loan is sized at that rate over 25 years. At your own expected rate of 4.99%, the payment on that loan is $2,566.98 a month. Add the $60,000 down payment and the price you can reach is about $488,510.
Now say you buy a car first, and monthly debts go from $400 to $1,000. The maximum mortgage falls by more than $77,000, to $364,391, and the price to $413,434. That’s a lot of borrowing power to lose for $600 a month, and most people don’t see it coming. A bigger paycheque works the other way: at $150,000 the loan reaches $627,562.
A rough rule falls out of those rows. Each $1 of monthly debt costs about $129 of borrowing power ($77,403 across $600), while each extra $1 of yearly income adds about $4.64 ($185,768 across $40,000). Those ratios only hold for this household and these rules, but they show why paying off a car loan before applying can matter more than a small raise.
What can this estimate not see?
It uses the common 39% housing and 44% total debt limits, and your lender may use its own. Half of any condo fee counts toward housing costs. A lender may also weigh your credit history, job history and other things this tool can’t see, so the real number could land above or below.
And don’t shop at the top of the range. Closing costs, moving and repairs all come out of cash, so price them with the closing costs calculator. To see if your income passes at a loan you’ve picked, try the mortgage stress test calculator. Prefer to start from what you can afford rather than a lender’s cap? The mortgage affordability calculator does that, and the down payment calculator gives the minimum cash for a given price.
How do I get ready before I ask?
Lenders usually want proof of income, a list of your debts and some evidence of the down payment, so gather recent pay records and statements first. Avoid taking on new credit while you wait, since that new car loan can shrink your range as the table shows. A pre-approval also expires, so time it for when you’re actually ready to look at homes, not months ahead.
Sources, and how we checked them
The stress test rule, the greater of your rate plus 2% and 5.25%, comes from OSFI’s page on the minimum qualifying rate, last updated in January 2026. The income limits and the 25 year amortization are set inside the calculator. This site has no tie to any government body, and the result is an estimate.
About this calculator
- What it does
- Estimate the mortgage a lender may pre-approve from income, debts and down payment.
- Category
- Mortgage
- Last checked
- September 30, 2026
- Result type
- Estimate for information only, not tax advice.
Frequently asked questions
How big a mortgage could I be pre-approved for?
The default household, with $110,000 income, $400 in debts and $60,000 down, reaches about $441,794.
Is this a real pre-approval?
No. A lender may offer a different amount once it has seen your credit, proof of income and other details.
Why do monthly debts cut the amount so much?
Debt payments eat into the total debt limit. Going from $400 to $1,000 a month lowers the default result by more than $77,000.
How long does a rate hold last?
The calculator notes that holds usually run 90 to 120 days. Ask your lender for the exact period.
What amortization is used?
25 years, with the loan sized at the stress test rate.
Sources and updates
Updated: . How we check rates · Editorial team · Updates