Mortgage affordability calculator
Determine How Much Mortgage You Can Afford in Canada
Buying a home is a significant financial commitment, and understanding how much mortgage you can afford is crucial. Our Mortgage Affordability Calculator helps Canadian homebuyers estimate their borrowing capacity based on income, expenses, and debt obligations.
Monthly Payment
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Minimum Annual Income Required
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Key Features of Our CMHC Insurance Calculator:
- Accurate Mortgage Affordability Estimation: Determine how much you can borrow based on your financial situation.
- GDS and TDS Ratio Calculations: Check if your debt-to-income ratio meets lender requirements.
- Stress Test Analysis: Ensure you qualify under Canada’s mortgage stress test.
- Comprehensive Cost Breakdown: Understand monthly payments and additional homeownership costs.
How to Use the Mortgage Affordability Calculator
- Enter Your Gross Annual Income: The total income before taxes.
- Input Your Down Payment: The amount you plan to put toward the home purchase.
- Provide Your Monthly Expenses and Debts: Include car loans, credit cards, and other obligations.
- Select an Interest Rate and Amortization Period: These factors influence your monthly payment.
- Calculate: Instantly see your affordable home price, required income, and loan eligibility.
Understanding Mortgage Affordability in Canada
What is Mortgage Affordability?
Mortgage affordability refers to the amount a homebuyer can comfortably borrow without financial strain. Lenders assess affordability using key metrics such as:
- Gross Debt Service (GDS) Ratio
- Total Debt Service (TDS) Ratio
- Mortgage Stress Test Qualification
How Big of a Mortgage Can I Afford?
If you’re wondering how much mortgage can I afford, the calculation includes:
For example, if your gross annual income is $80,000:
- GDS Limit (39%) = $31,200 per year ($2,600/month)
- TDS Limit (44%) = $35,200 per year ($2,933/month)
If your total monthly debt payments are $500, your mortgage affordability is $2,100/month.
Use our Mortgage Affordability Calculator Canada to determine your affordability.
Mortgage Stress Test: Why It Matters
Canadian homebuyers must pass the mortgage stress test, which ensures affordability even if interest rates rise.
- Qualifying Rate: Higher of 5.25% or your mortgage rate + 2%.
- If the test is failed, homebuyers must adjust their budget or increase their down payment.
How to Increase Mortgage Affordability
- Save for a Larger Down Payment: A bigger down payment lowers your mortgage amount and monthly payments.
- Reduce Debt Obligations: Paying off loans and credit card balances improves your TDS ratio.
- Increase Your Household Income: A higher income improves loan eligibility.
Additional Homeownership Costs to Consider
Aside from mortgage payments, homeowners should budget for:
- Land Transfer Tax: Calculated using our Ontario land transfer tax calculator.
- Property Taxes & Utilities: Vary by location and property value.
- Home Insurance & Maintenance: Annual costs for repairs and insurance coverage.
FAQs on mortgage payment calculator
What mortgage can I afford calculator?
Our Mortgage Affordability Calculator helps estimate how much you can borrow based on income and expenses.
Can I afford this mortgage calculator?
Yes, input your financial details into the calculator to see if you qualify under lender guidelines.
How does the stress test impact my mortgage affordability?
The stress test ensures you can still afford your mortgage if interest rates increase by 2% or more.
What’s the minimum down payment required in Canada?
- 5% for homes under $500,000
- 10% for homes between $500,000 and $1M
- 20% for homes over $1M (to avoid CMHC insurance)
How much mortgage can I afford in Ontario?
Use our income calculator Ontario for mortgage affordability to estimate your loan eligibility.
Plan Your Home Purchase Wisely
Understanding mortgage affordability is key to making informed home-buying decisions. Use our Mortgage Affordability Calculator to determine your home-buying budget and prepare for homeownership confidently.
Get Personalized Mortgage Advice with Pegasus Mortgage Lending
Maximize your mortgage affordability with expert guidance from Pegasus Mortgage Lending. Use our Mortgage Affordability Calculator today to find out how much home you can afford.
