Housing Affordability Calculator


Mortgage Affordability Calculator

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How much mortgage can I afford?The first step in searching for your home is understanding how large of a mortgage you can afford. With a few inputs, you can determine how much mortgage you may be comfortable with and the potential price range of your future home. Knowing your total household income, how much you’ve saved for a down payment, and your monthly expenses (car payments, loan payment, living expenses, and so on), plus new expenses you’d take on (property taxes, condo fees, utilities), you can get a reasonable estimate.How to estimate affordabilityTo estimate mortgage affordability, lenders will use:1. Gross Debt Service (GDS) is the percentage of your monthly household income that covers your housing costs (including mortgage payments, condo fees, utilities and taxes). It should be at or under 35% of your pre-tax household income.2. Total Debt Service (TDS) is the percentage of your monthly household income that covers your housing costs and any other debts (including car payments and other loan expenses). It should be at or under 42% of your pre-tax income.How your down payment affects affordabilityThe amount you have saved for a down payment is also another important piece of information to help determine affordability. Depending on the purchase price of a home, there are minimum amounts required for your down paymentMinimum amount of down payment required based upon the purchase price of the home:Less than $500,000 requires a minimum 5% of the purchase price$500,000 to $999,999 requires 5% of the first $500,000 of the purchase price AND 10% for the portion of the purchase price above $500,000$1 million or more requires 20% of the purchase priceAlso, if your down payment is less than 20% of the price of your home, you’ll need to purchase CMHC insurance, which can be added to the principal amount of your mortgage.