Free Tool
Home Affordability Calculator
Based on CMHC qualification standards. Enter your income, debts, and down payment to find your maximum purchase price in today's market.
Your Finances
What You Can Afford
Maximum Purchase Price
$751,000
Limited by Gross Debt Service (39%)
Monthly Cost Breakdown
Property tax estimated at 1% of purchase price annually. Heating estimated at $150/month.
Estimates based on CMHC GDS (39%) and TDS (44%) qualification ratios. Canadian semi-annual compounding used. For pre-approval, speak with a mortgage broker.
How Much Home Can You Afford?
Canadian mortgage affordability is governed by two key ratios established by CMHC: the Gross Debt Service (GDS) ratio and the Total Debt Service (TDS) ratio. These ratios ensure that your housing costs remain within a manageable percentage of your gross income.
Most lenders in York Region and Durham Region use these same benchmarks, along with the federal mortgage stress test (qualifying at the higher of your contract rate + 2% or 5.25%), to determine how much they'll lend you.
Understanding GDS and TDS Ratios
GDS Ratio — 39% Max
Gross Debt Service. Includes mortgage payment, property taxes, and heating costs. Maximum 39% of gross monthly income for insured mortgages.
TDS Ratio — 44% Max
Total Debt Service. GDS + all other monthly debt payments (car loans, credit cards, student loans). Maximum 44% of gross monthly income.
CMHC Insurance Explained
When your down payment is less than 20%, Canadian law requires you to purchase CMHC mortgage insurance. This protects the lender — not you — against default. The premium is added to your mortgage balance.
| Down Payment | CMHC Premium |
|---|---|
| 5% – 9.99% | 4.00% |
| 10% – 14.99% | 3.10% |
| 15% – 19.99% | 2.80% |
| 20% or more | None |
CMHC insurance is only available for properties priced below $1,000,000. If your maximum purchase price is $1M or above, a 20% minimum down payment is required.
FAQ
How much income do I need to buy a $800,000 home in Ontario?
At a 5.5% interest rate with 20% down ($160,000) over 25 years, you'd need approximately $130,000–$140,000 in gross annual household income to qualify under CMHC's GDS ratio of 39%. Use our calculator above for your exact situation.
What is the GDS ratio and how does it affect my mortgage?
The Gross Debt Service (GDS) ratio measures your housing costs (mortgage payment + property taxes + heating) as a percentage of your gross monthly income. CMHC requires GDS to be 39% or less for insured mortgages.
What is the TDS ratio?
The Total Debt Service (TDS) ratio includes all your monthly debt obligations (housing costs + car payments + credit cards + other loans) as a percentage of gross monthly income. CMHC requires TDS to be 44% or less.
What is CMHC mortgage insurance and when do I need it?
CMHC (Canada Mortgage and Housing Corporation) insurance is required when your down payment is less than 20% of the purchase price. The premium is added to your mortgage. It is 4.00% for 5–9.99% down, 3.10% for 10–14.99% down, and 2.80% for 15–19.99% down. CMHC is not available for homes priced at $1 million or more.
What is the minimum down payment in Canada?
The minimum down payment is 5% for homes under $500,000; 10% on the portion between $500,000 and $999,999; and 20% for homes priced at $1,000,000 or more.