What is the Canadian mortgage stress test?

All applicants must qualify at their contract rate + 2% or 5.25%, whichever is higher, to ensure they can handle rate increases at renewal.

What counts as income for GDS/TDS calculations?

Employment income, self-employment income (2-year average), rental income (80%), pensions, investments. Bonuses and overtime may count at 50-100%.

Can I include a co-borrower's income?

Yes, combined household income and debts are used. Enter total household gross income for an accurate estimate.

What are typical heating costs for GDS calculations?

CMHC uses $100/month as default. Actual costs vary by province and home type — enter your actual estimate for accuracy.

Canadian Mortgage Affordability Calculator

Find out how much home you can afford using Canada's GDS and TDS ratios with the official mortgage stress test. All figures in CAD.

Annual Gross Income

Monthly Debt Payments

Down Payment

Mortgage Rate

Annual Property Tax

Annual Heating Cost

Monthly Condo Fees

Amortization (years)

yrs

Maximum Home Price

CA$565,074

Stress-tested at 7.09% · Limited by GDS (39%)

Max Mortgage

CA$465,074

Max Mortgage Payment

CA$3,283/mo

GDS Ratio

39.0% / 39% limit

TDS Ratio

44.0% / 44% limit

Stress Test Rate

7.09%

Down Payment

CA$100,000

How Canadian Mortgage Affordability Works

Canadian lenders use two debt ratios to determine how much mortgage you can afford. Both must be within the limits set by OSFI (Office of the Superintendent of Financial Institutions) and CMHC guidelines:

Gross Debt Service (GDS) — max 39%

GDS = (Monthly Mortgage + Property Tax + Heating + 50% Condo Fees) ÷ Gross Monthly Income

Total Debt Service (TDS) — max 44%

TDS = (All GDS items + All other monthly debt payments) ÷ Gross Monthly Income

The binding ratio is whichever gives the lower maximum mortgage payment. The stress test then applies by qualifying you at the higher of your contract rate + 2% or 5.25%.

The Formula

Max Mortgage Payment (GDS) = Income × 0.39 - Tax/12 - Heat/12 - (Condo × 0.5)
Max Mortgage Payment (TDS) = Income × 0.44 - Tax/12 - Heat/12 - (Condo × 0.5) - Debts

Use the lower of the two, then:
Max Loan = Payment × [(1+r)^n - 1] / [r × (1+r)^n]
(using stress-test rate with Canadian semi-annual compounding)

Max Home Price = Max Loan + Down Payment

Example: Calgary Household

Combined Income $140,000 — Buying in Calgary

Gross Monthly Income	$11,667
Monthly Debts (car loan)	$400
Down Payment	$100,000
Rate (5.09%) / Stress (7.09%)	Qualified at 7.09%
Property Tax/mo	$350
Heating/mo	$200
GDS max mortgage pmt	$4,000
TDS max mortgage pmt	$3,600 (binding)
Max Loan (at 7.09%, 25yr)	$502,000
Max Home Price	$602,000

Alberta has no land transfer tax, which is a significant advantage. The same buyer in Ontario would face ~$9,000 in LTT on this purchase price.

Frequently Asked Questions

All Canadian mortgage applicants must prove they can afford payments at their contract rate + 2% or 5.25%, whichever is higher. This ensures buyers can still manage payments if rates rise at renewal. It applies to all federally regulated lenders and has been in place since 2018.

Lenders count: salaried employment income (usually 100%), self-employment income (average of 2 years T2125), rental income (typically 80% of gross), child support received, pension income, investment income (documented). Tips, bonuses, and overtime may count at 50-100% depending on documentation.

Yes, adding a co-borrower (spouse, partner, family member) combines both incomes and debts into the GDS/TDS calculation. Both people are equally responsible for the mortgage. Enter the combined household income in this calculator.

CMHC uses $100/month as a default heating estimate if you don't know the actual amount. Actual costs vary: a Toronto condo may have $60/month in heating (gas included in fees), while an Edmonton house may see $200-300/month in winter. Use your best estimate for accuracy.