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.
GDS (Gross Debt Service) must stay under 39%. TDS (Total Debt Service) must stay under 44%. The stricter limit determines your max mortgage.
The OSFI B-20 stress test qualifies you at max(5.1% + 2%, 5.25%) = 7.1%. Your actual payment will be lower.
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 (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.