🏡 Mortgage Affordability Calculator
Your Qualification Summary
First-Time Home Buyer Benefits:
- Access to Lower Down Payments: While CMHC insurance is required for down payments under 20%, it allows first-time buyers to enter the market with as little as 5% down.
- Home Buyers' Plan (HBP): You may be able to withdraw up to \$35,000 (per person) from your RRSPs tax-free to buy or build a home.
- Provincial Land Transfer Tax Rebates: Many provinces offer rebates or exemptions on land transfer taxes for first-time home buyers. (e.g., Ontario, British Columbia)
- First-Time Home Buyers' Tax Credit (FTHBTC): A non-refundable tax credit of \$10,000 can provide up to \$1,500 in federal tax relief.
Note: Eligibility criteria apply for all programs. Please consult a financial advisor or government resources for personalized advice.
Pie chart showing principal, interest, and CMHC premium amounts
Amortization Breakdown Over Time
Line chart showing annual principal and interest paid over the mortgage term.
🏡 Mortgage Affordability Calculator: FAQ and Terms & Conditions
Frequently Asked Questions (FAQ)
1. What does this Mortgage Affordability Calculator do?
This Mortgage Affordability Calculator helps you estimate how much home you can afford in Canada. It calculates your potential mortgage qualification, estimated monthly payments, and includes key factors like GDS/TDS ratios, CMHC mortgage insurance, provincial property taxes, and an optional stress test. You can also view detailed amortization charts and tables for a comprehensive financial breakdown of your mortgage.
2. How accurate are the mortgage affordability estimates?
This tool provides **estimates only** and should not be considered a mortgage pre-approval or a guarantee of lending. While you can *opt-in* to apply a 2% stress test rate within the calculator (your entered interest rate + 2%), actual lenders will apply a federal stress test, which is the higher of your contract rate + 2% or the Bank of Canada's benchmark qualifying rate (currently 5.25% as of July 2025). Your final mortgage qualification will depend on a comprehensive assessment of your financial situation by a licensed lender. Always consult a licensed mortgage broker or financial institution for accurate pre-approval and personalized advice.
3. What are GDS and TDS ratios for Canadian mortgage qualification?
- GDS (Gross Debt Service Ratio): This measures your total monthly housing costs (principal, interest, property taxes, heating/condo fees, and any applicable provincial sales tax on CMHC premium) as a percentage of your gross monthly income. Lenders typically look for a GDS ratio of **39% or lower**.
- TDS (Total Debt Service Ratio): This measures your total monthly housing costs *plus* any other recurring monthly debt payments (e.g., credit card minimums, car loans, lines of credit) as a percentage of your gross monthly income. Lenders typically look for a TDS ratio of **44% or lower**.
- If your GDS or TDS ratios are higher than these benchmarks, it may impact your mortgage qualification and approval.
4. How are property taxes estimated in this calculator?
If you leave the 'Property Tax' field blank, the calculator will automatically estimate your annual property tax based on an average rate for your selected Canadian province (e.g., approximately 1.25% of home price for Ontario). These are estimates; for precise figures for your target property, always verify with the specific municipality. Note that general sales tax (GST/HST/PST) is typically applied only to new homes, not resale properties, and is therefore not included in the home price calculation here.
5. What is CMHC mortgage insurance and how is it calculated?
CMHC (Canada Mortgage and Housing Corporation) mortgage loan insurance is mandatory in Canada if your down payment is less than 20% of the home's purchase price. It protects the lender in case you default on your mortgage. The premium rates are generally:
- 4.00% of the mortgage amount for down payments between 5% and 9.99%
- 3.10% of the mortgage amount for down payments between 10% and 14.99%
- 2.80% of the mortgage amount for down payments between 15% and 19.99%
6. How does my credit score affect mortgage qualification?
Your credit score plays a significant role in mortgage qualification, as lenders use it to assess your creditworthiness and help determine the interest rate you'll be offered. While this calculator provides general feedback (e.g., 'Good', 'Okay', or 'Might be difficult') based on the score you enter, a score below 600 can make it challenging to obtain a mortgage or may result in a higher interest rate. Generally, higher credit scores lead to better mortgage rates and terms.
7. What are the benefits for first-time home buyers in Canada?
If you check the 'First-Time Home Buyer' box in the calculator, a dedicated section will appear in the results summary outlining potential federal and provincial benefits. These can include:
- Access to Lower Down Payments: CMHC insurance enables first-time buyers to enter the market with as little as 5% down.
- Home Buyers' Plan (HBP): Allows eligible individuals to withdraw up to \$35,000 (per person) from their RRSPs tax-free to buy or build a home.
- Provincial Land Transfer Tax Rebates: Many provinces offer rebates or exemptions on land transfer taxes for first-time home buyers (e.g., Ontario, British Columbia).
- First-Time Home Buyers' Tax Credit (FTHBTC): A non-refundable federal tax credit of \$10,000 can provide up to \$1,500 in tax relief.
8. What payment frequency options are available in the calculator?
This Mortgage Affordability Calculator allows you to choose between Monthly, Bi-Weekly, or Weekly payment frequencies. This selection affects your individual payment amount and how often you make payments, but it does not change the overall interest calculation or the total amortization period. Please note that accelerated payment options (e.g., accelerated bi-weekly or weekly payments) are not supported by this calculator.
9. Can I save or print my mortgage affordability results?
Yes, after calculating your results, you can click the 'Download Summary as JPEG' button to save a snapshot of your mortgage affordability summary, including key financial figures and charts, directly to your device as an image file. This allows for easy sharing or record-keeping.
10. What are the next steps after using this Mortgage Affordability Calculator?
After using this Mortgage Affordability Calculator, your next crucial steps should include:
- Consulting a Licensed Mortgage Professional: They can provide a definitive pre-approval, verify your exact qualification based on your full financial profile, and help you secure the best mortgage rates and terms.
- Verifying Local Property Taxes: Property tax rates can vary significantly by municipality. Contact the specific municipal office for the area you are interested in for precise annual property tax figures.
- Exploring Government Programs: Investigate federal programs like the Home Buyers' Plan (HBP), the First-Time Home Buyer Incentive (FTHBI), and any provincial land transfer tax rebates or other incentives you might be eligible for.
Helpful Notes for Mortgage Affordability and Qualification
- Accuracy is Key: Input accurate financial details to receive the most reliable estimates from the calculator.
- Down Payment Minimums: In Canada, minimum down payments are typically: 5% for homes up to \$500,000; 5% on the first \$500,000 and 10% on the portion above \$500,000 for homes between \$500,001 and \$999,999; and 20% for homes priced at \$1,000,000 or more.
- Federal Mortgage Stress Test: While the calculator allows you to apply an optional 2% stress test, actual lender qualifications will apply the higher of your contract rate + 2%, or the Bank of Canada's benchmark qualifying rate (currently 5.25% as of July 2025). Your actual affordability determined by a lender may be lower than estimated here.
- Debt Management & Ratios: If your GDS (Gross Debt Service) ratio exceeds 39% or your TDS (Total Debt Service) ratio exceeds 44%, consider reducing existing debts or re-evaluating your target home price to improve your chances of mortgage approval.
- Professional Advice: Always confirm these estimates with a licensed mortgage professional or financial institution before making any financial commitments.
Terms & Conditions of Use
- Estimates Only: This Mortgage Affordability Calculator tool provides financial estimates for informational purposes only and is not a guarantee of mortgage approval, a pre-approval, or an offer of credit. Results exclude specific lender fees and other potential costs.
- No Liability: The creators and providers of this calculator are not liable for any financial decisions or outcomes based on the estimates provided. It is essential to consult with a licensed mortgage professional, financial advisor, or legal expert for personalized advice.
- Data Privacy: This calculator operates entirely client-side; no personal data or inputs are stored, transmitted, or collected by the website's servers. All calculations are performed locally in your browser. Any JPEG downloads are saved directly to your device.
- Assumptions: The calculator uses estimated 2025 Canadian mortgage rules, average provincial property tax rates, and general CMHC insurance guidelines. Actual rates, rules, and costs may vary. Always verify specific figures with lenders, municipalities, and relevant government bodies.
- Usage: This tool is intended for personal, non-commercial use only. Unauthorized modification, distribution, or commercial use is prohibited.
- Third-Party Credit: This calculator utilizes html2canvas (under MIT license) for the JPEG download functionality.
- Changes to Rules: Canadian mortgage rules, interest rates, and government programs are subject to change without notice. Always confirm the latest information with mortgage professionals and official sources.
Contact: For personalized mortgage advice and support, please consult a licensed mortgage professional or financial institution.