How much house can I afford in Canada? GDS, TDS, the stress test and a calculator
Online "affordability" tools often just multiply your income by a number. Lenders do something more precise: they run two debt service ratios at a stressed interest rate, then check your down payment against minimum tiers. This guide walks through each rule with the official figures, shows a worked example, and includes a calculator so you can see which ratio limits you.
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Affordability calculator
What price could you qualify for?
Educational estimate. Uses CMHC's 39% GDS and 44% TDS limits for insured mortgages, a qualifying rate of the greater of your rate plus 2 points or 5.25%, semi-annual compounding, 50% of condo fees, and the minimum down payment tiers. It ignores mortgage insurance premiums, which are added to your mortgage when your down payment is under 20% and would lower the price slightly. Uninsured lenders set their own limits, and 30-year amortization applies only to first-time buyers and new builds (Finance Canada). Your lender's numbers will differ.
GDS and TDS explained
Mortgage lenders run two tests. CMHC, which sets the standard for insured mortgages, says it "restricts debt service ratios to 39% (GDS) and 44% (TDS)."
| Ratio | What counts | Limit |
|---|---|---|
| GDS (gross debt service) | Mortgage principal and interest, property taxes, heating, and 50% of condo fees | 39% of gross household income |
| TDS (total debt service) | Everything in GDS plus car loans, credit card minimums, student loans, lines of credit and other debt payments | 44% of gross household income |
Gross means before tax. Whichever ratio runs out first sets your limit: with few other debts it is usually GDS, and with big car or credit payments it becomes TDS. That is why paying down a debt can raise your price more than a small raise at work. See credit utilization for how card balances also affect your score. The 39% and 44% figures are the insured-mortgage limits. Uninsured lenders apply their own policies, so use them as a planning guide.
The stress test rate
Your ratios are not run at your actual rate. CMHC says lenders qualify borrowers at "the greater of the contract interest rate plus 2 per cent, or 5.25 per cent," and OSFI's rule for uninsured mortgages uses the same formula, in effect since June 1, 2021. So a 4.5% mortgage is tested at 6.5%, and a 3% mortgage is tested at 5.25%, because the floor beats 5%.
On January 29, 2026, OSFI said loan-to-income limits "will remain in place" and that existing debt service expectations in Guideline B-20 continue to complement them. Our stress test guide covers who skips it, such as uninsured borrowers who switch lenders at renewal (OSFI removed that requirement on November 21, 2024, per Finance Canada). If you are weighing rate types, read variable vs fixed.
Minimum down payment tiers
The Financial Consumer Agency of Canada lists these minimums:
| Purchase price | Minimum down payment |
|---|---|
| $500,000 or less | 5% of the price |
| $500,000 to under $1.5 million | 5% of the first $500,000 plus 10% of the portion above |
| $1.5 million or more | 20% of the price |
On a $750,000 home that is $25,000 plus $25,000, or $50,000. On a $1.4 million home it is $25,000 plus $90,000, or $115,000. Finance Canada raised the insured price cap from $1 million to $1.5 million on December 15, 2024 and said it lowers the minimum down payment on a $1.4 million home by up to $165,000. CMHC says the price must be below $1,500,000 for its homeowner insurance.
If your down payment is under 20%, you generally need mortgage loan insurance. FCAC says premiums run from 0.6% to 4.5% of the mortgage, and you can add the premium to the mortgage. Saving toward this? Our down payment guide, the FHSA and the Home Buyers' Plan are the usual tools. The FHSA allows up to $8,000 a year with a $40,000 lifetime limit, and the HBP limit for RRSP withdrawals was raised to $60,000, per Finance Canada. See all first-time buyer programs.
Amortization: 25 vs 30 years
The standard insured amortization is 25 years. Since December 15, 2024, Finance Canada says 30-year amortizations are available to all first-time home buyers and all buyers of new builds. A longer amortization lowers the payment and therefore raises the price your ratios allow, but you pay more interest over time. Our 30-year amortization guide compares the real cost.
Worked example
Sam and Priya earn $120,000 combined. Their car loan and student loan payments total $400 a month. They expect property tax of $300 and heating of $120 a month, will buy a house (no condo fees), and have $60,000 saved. They are shopping at an illustrative 4.5%, so the qualifying rate is 6.5%.
| Step | Arithmetic | Result |
|---|---|---|
| Monthly gross income | $120,000 / 12 | $10,000 |
| GDS room for principal and interest | 39% x $10,000 - $300 - $120 | $3,480 |
| TDS room for principal and interest | 44% x $10,000 - $400 - $300 - $120 | $3,580 |
| Binding limit | The smaller, GDS | $3,480 |
| Mortgage that payment supports at 6.5%, 25 years | Semi-annual compounding | about $519,500 |
| Estimated maximum price | $519,500 + $60,000 | about $579,500 |
| Minimum down payment at that price | $25,000 + 10% x $79,500 | $32,950 |
| Actual payment at 4.5% on $519,500 | about $2,876 |
Their $60,000 clears the $32,950 minimum. At about 10% down they would still need mortgage insurance, and the premium is usually added to the mortgage, so the real price would be a little lower. Now compare three changes:
| Change | Approx. mortgage | Approx. price |
|---|---|---|
| Base case (25 years) | $519,500 | $579,500 |
| 30-year amortization (first-time or new build) | $555,500 | $615,500 |
| Other debts rise to $1,000 a month (TDS now binds at $2,980) | $444,900 | $504,900 |
| Contract rate 3.0% (qualifying floor 5.25% applies) | $584,000 | $644,000 |
The takeaway: a $600 monthly debt payment cuts the supportable price by roughly $75,000, far more than most people expect. Calculator numbers are estimates; insurance premiums and your lender's own rules will move them.
Costs ratios do not show
Passing the ratios means a lender will approve you, not that the payment is comfortable. The tests leave out groceries, child care, commuting, insurance, maintenance and closing costs such as legal fees and land transfer tax, which vary by province and city. Before you commit, run your real spending through a budget and check your prepayment options, because your payment resets at renewal (see mortgage renewal). More calculators are on our tools page.
How to find your own number
How to estimate how much house you can afford
- Add up gross household income and divide by 12.
- List other monthly debt payments, property tax, heating and half of any condo fees.
- Find the qualifying rate: the greater of your rate plus 2 points or 5.25%.
- Take 39% of monthly income minus carrying costs (GDS) and 44% minus debts and carrying costs (TDS); use the smaller number.
- Convert that payment to a mortgage at the qualifying rate and amortization, then add your down payment.
- Check the down payment against the minimum tiers and test the payment at your actual rate.
Questions people ask
How much house can I afford in Canada on a $100,000 income?
It depends on your debts, down payment, property tax, heating and rate. A lender tests housing costs at 39% of gross income (GDS) and total debts at 44% (TDS) using the greater of your rate plus 2 points or 5.25%. At $100,000 that means $3,250 a month for housing costs before other debts. Use the calculator above for your inputs.
What are the GDS and TDS limits?
CMHC restricts gross debt service to 39% and total debt service to 44% of gross household income for insured mortgages. GDS includes mortgage principal and interest, property taxes, heating and 50% of condo fees. TDS adds your other debt payments.
What is the mortgage stress test rate?
The greater of your contract rate plus 2 percentage points or 5.25%. A 4.5% mortgage is tested at 6.5%, and a 3% mortgage is tested at 5.25%.
How much down payment do I need in Canada?
Five percent of the first $500,000 of the price plus 10% of the portion above $500,000, up to a price below $1.5 million. At $1.5 million or more the minimum is 20%. Under 20% down you generally need mortgage loan insurance.
Can I get a 30-year mortgage in Canada?
Yes, 30-year amortizations are available on insured mortgages to all first-time home buyers and all buyers of new builds as of December 15, 2024, per Finance Canada. Other insured buyers are limited to 25 years.
What is the maximum price for an insured mortgage?
Below $1.5 million. Finance Canada raised the cap from $1 million on December 15, 2024. Homes at $1.5 million or more need at least 20% down.
Does my down payment change how much house I can afford?
Yes in two ways: it is added to the mortgage to form the price, and a bigger down payment can reduce or remove insurance premiums, which add 0.6% to 4.5% of the mortgage.
Looni reads your statements and flags fees, subscriptions and interest charges, so more of your income goes toward your down payment. Read-only, no advice.
Sources
Government of Canada, Financial Consumer Agency of Canada, Down payment (5%, 10% and 20% tiers; premiums of 0.6% to 4.5%), CMHC, Calculating GDS / TDS (39% and 44%, items counted, qualifying rate) and general requirements (price below $1,500,000), Department of Finance Canada, Boldest mortgage reforms in decades come into force today (December 15, 2024: $1.5 million cap, 30-year amortization for first-time buyers and new builds, FHSA and HBP limits), OSFI, Minimum Qualifying Rate letter (greater of rate plus 2% or 5.25%) and quarterly release of January 29, 2026 (LTI limits remain, B-20 debt service expectations continue). Sam and Priya are illustrative, and the payment math (semi-annual compounding) is ours.