# How Much Mortgage Can You Afford in Canada?

> See how big a home price and mortgage payment you could qualify for in Canada from your income, debts and savings, after the stress test

With $120,000 of income and $60,000 saved, the default settings put your price ceiling near $533,556. The monthly payment tops out at $3,416.67, which supports a mortgage near $488,000. Put in your own income, debts and savings below.

## How does the calculator set the limit?

Lenders don't look at income alone. They use two ratios. The first counts housing costs only: the mortgage payment, property tax, heat and half of any condo fees. The second adds your other debts on top.

Here's how it works. The calculator caps the first at 39% of gross monthly income and the second at 44%, then goes with whichever gives the smaller payment. It sizes the loan at the stress test rate, the higher of your rate plus 2% and 5.25%, over 25 years.

## Which matters more, your deposit or your debts?

Deposit, debts and income all move the answer, and you can't fix all three overnight. The table shows how far the first two push the price away from the default case.

| Change | Maximum price | Limit that applies |
| --- | --- | --- |
| Default: $60,000 down, $500 of debts | $533,556 | Housing costs, 39% |
| Down payment raised to $100,000 | $574,938 | Housing costs, 39% |
| Monthly debts raised to $1,500 | $395,931 | Total debt, 44% |

Notice the pattern. An extra $40,000 of savings lifts the ceiling by $41,382, a bit more than the savings themselves. An extra $1,000 a month in debts knocks off $137,625. Debt hurts far more than savings help.

## How much house does $120,000 a year buy?

Start with the defaults: $120,000 of income, a rate of 4.99%, property tax of $4,000 a year and $150 a month for heat. Monthly income is $10,000, and 39% of that is $3,900. Tax and heat take $483.33, which leaves $3,416.67 for the mortgage payment.

The qualifying rate is 6.99%, so that payment supports a loan of about $488,236. Add your $60,000 deposit and the maximum price is $533,556. The calculator also checks that your deposit meets the minimum for that price, and that any insurance premium fits inside the limit. If either check fails, you'll see it.

Now say you've got $1,500 a month in car and card payments on top. The debt ratio becomes the tighter limit, the payment falls to $2,416.67 and the price drops to $395,931. That's more than $137,000 gone. Ouch.

Clearing debt before you apply can matter as much as a bigger deposit. Run the numbers both ways before you decide where your savings go.

## Will the payment you actually make be that high?

No, and that's the point of the stress test. The $3,416.67 is what the lender uses to test you at 6.99%. If you actually borrow $488,236 at the real 4.99% over 25 years, the payment is about $2,837 a month, roughly $580 under the test figure. Think of the gap as a cushion for the day your mortgage renews at a higher rate. It isn't spare cash to spend on a pricier house.

## What does the estimate leave out?

Plenty of buyers look at the mortgage payment and forget everything else. Property tax, heat and condo fees all count against your ratio, and lenders also set their own limits, check your credit and may use other rules of their own, so treat this as a ballpark figure and not as an approval, since it isn't one.

If your deposit is what holds you back, the tool says so. A larger one raises the price you can reach. The result assumes 25 years, and longer terms on insured mortgages are restricted.

Want to see the payment at a higher rate? Use the [mortgage stress test calculator](https://tax-services.ca/calculators/mortgage/mortgage-stress-test), then confirm the minimum cash with the [down payment calculator](https://tax-services.ca/calculators/mortgage/down-payment). The [mortgage payment calculator](https://tax-services.ca/calculators/mortgage/mortgage-calculator) gives the exact payment on the price you pick. Income drives everything here, and the [income tax calculator](https://tax-services.ca/calculators/income-tax/income-tax-calculator) shows what you keep after tax.

## Where we got these figures

The stress test rule and the down payment tiers come from federal sources, including the [Financial Consumer Agency of Canada](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html). The 39% and 44% ratios are the values we use inside this calculator. Your lender may apply different ones. This website has no connection with any lender or government body.

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Source: https://tax-services.ca/calculators/mortgage/mortgage-affordability
Last updated: 2026-10-05
Independent information site. Not affiliated with the CRA. No services, no guarantee of accuracy. See https://tax-services.ca/disclaimer