Home Affordability Calculator
Enter your monthly budget and down payment to find out the maximum home price you can afford in Canada. Updated for 2026.
📋 Canadian Down Payment Rules
| Home Price | Minimum Down Payment | CMHC Required? |
|---|---|---|
| Under $500,000 | 5% of purchase price | Yes |
| $500,000 – $999,999 | 5% on first $500K + 10% on remainder | Yes |
| $1,000,000 – $1,499,999 | 20% minimum | No — not CMHC eligible |
| $1,500,000+ | 20% minimum | No |
How Canadian Lenders Determine Affordability
Canadian mortgage lenders use two key debt service ratios. The Gross Debt Service (GDS) ratio — housing costs (mortgage, property tax, heating, 50% of condo fees) — must not exceed 32% of gross monthly income. The Total Debt Service (TDS) ratio — all monthly debt payments combined — must not exceed 44% of gross income.
On top of these ratios, the federal mortgage stress test requires qualifying at a rate higher than your contract rate — either your rate plus 2%, or 5.25%, whichever is higher. In the current rate environment, this is the primary factor limiting buying power. A household that qualified for $700,000 at 2% rates qualifies for significantly less today.
Beyond lender approval, consider what you can comfortably sustain. Owning a home includes costs beyond the mortgage: property taxes, home insurance, maintenance (budget 1-2% of home value annually), utilities, and possibly condo fees. Many financial advisors suggest keeping total housing costs under 30% of take-home pay — not gross income — for long-term financial health.
Frequently Asked Questions
Gross Debt Service — your total monthly housing costs (mortgage P+I, property tax, heat) should not exceed 32% of your gross monthly income.
Personal savings, family gifts (with documentation), RRSP Home Buyers' Plan withdrawal (up to $35,000 per person), or proceeds from selling another property.
5% for homes up to $500,000. 10% on the portion $500,000-$999,999. 20% minimum for homes $1,000,000+ (CMHC insurance not available above this threshold).
Canada's down payment rules are tiered
The minimum is not a single percentage. It is 5% on the first $500,000, 10% on the portion between $500,000 and $1,500,000, and 20% on any home priced above $1,500,000 — where mortgage default insurance is unavailable entirely.
On an $800,000 home that means $25,000 plus $30,000 — $55,000, not $40,000. And the jump at $1.5M is a cliff, not a slope: a $1,499,000 home needs about $125,000 down while a $1,501,000 home needs $300,200. If you are near that line, the price you negotiate changes the cash you need far more than it changes the mortgage.
What you qualify for is not what you can afford
Lenders test you on GDS up to 39% and TDS up to 44% of gross income, calculated at the stress-test qualifying rate rather than your actual rate. Those ratios use gross income — before tax, CPP and EI — so a household approved at 39% GDS may be spending well over half its take-home pay on housing.
Run the approval figure through the paycheque calculator and check what it is as a share of net income. Many buyers find the number a lender will approve is genuinely uncomfortable to live with, and the gap is entirely explained by gross versus net.
Costs beyond the down payment
Budget 1.5%–4% of the purchase price for closing costs on top of the down payment. In Ontario that is dominated by land transfer tax — with a second, equal municipal tax in Toronto — plus legal fees, title insurance, inspection and the property tax adjustment. In Alberta there is no land transfer tax at all, which is why the same purchase needs a much smaller cash cushion there.
Mortgage default insurance applies below 20% down. The premium is normally added to the mortgage rather than paid at closing — so it increases the balance you pay interest on for the full amortisation — and Ontario, Quebec, Saskatchewan and Manitoba charge provincial sales tax on the premium, which must be paid in cash at closing.
Where the down payment can come from
A first-time buyer can combine the FHSA (up to $40,000) with the RRSP Home Buyers' Plan (up to $60,000) — $100,000 per person, or $200,000 for a qualifying couple. HBP money must be repaid over 15 years; FHSA money never is.
A gift from an immediate family member is acceptable to lenders, but requires a signed gift letter confirming it is not a loan. Expect to show a 90-day history for all down payment funds — lenders must trace the source, so money that appears suddenly will need documenting. Borrowed down payments are generally not permitted, and a loan taken to fund one will show up in your TDS anyway.