Canadian Mortgage Affordability Calculator (2026)
Last updated
Computes the maximum mortgage and home price that satisfies the OSFI B-20 stress test (GDS ≤ 39%, TDS ≤ 44% at the qualifying rate) given household income, down payment, and other monthly debts.
This calculator solves the OSFI B-20 stress test in reverse. Given the borrower's gross household income, down payment, monthly housing costs, and other monthly debt payments, it computes the largest mortgage principal that would satisfy both GDS ≤ 39% and TDS ≤ 44% at the qualifying rate (the greater of the contract rate + 2% or the 5.25% floor).
The output identifies which ratio binds — GDS or TDS — so the borrower knows what to address if the result is below their target home price. GDS-binding suggests housing costs (mortgage + property tax + heating + condo) are the constraint; TDS-binding suggests other monthly debt payments are pushing the total over the cap.
How this calculator works
Step 1 — Qualifying rate. r_q = MAX(contract rate + 2%, 5.25%)
Step 2 — Maximum monthly mortgage payment under each cap.
max_payment_GDS = (income / 12) × 0.39 − property tax/12 − heating/12 − 0.5 × condo
max_payment_TDS = (income / 12) × 0.44 − property tax/12 − heating/12 − 0.5 × condo − other debts
Step 3 — Take the smaller (binding ratio). max_payment = MIN(max_payment_GDS, max_payment_TDS)
Step 4 — Invert the amortization formula to solve for principal at the qualifying rate.
max_principal = max_payment × [(1 + r)^n − 1] / [r × (1 + r)^n]
where r is the per-period qualifying rate (semi-annual
compounded equivalent, see the Mortgage Payment Calculator) and
n is the total number of payments (12 × amortization
years for monthly payments).
Step 5 — Add the down payment. max_home_price = max_principal + down_payment
Sources: OSFI Guideline B-20; Interest Act of Canada (semi-annual compounding).
Worked example
$140,000 household income, $100,000 down, 4.99% contract rate, 25-year amortization, $6,000/yr property tax, $1,800/yr heating, no condo, $500/mo other debts:
- Qualifying rate:
MAX(4.99% + 2%, 5.25%) = 6.99% - Monthly income:
$11,667 - GDS max housing cost:
$11,667 × 39% = $4,550 - TDS max total cost:
$11,667 × 44% = $5,133 - Fixed non-mortgage housing cost:
500 + 150 = $650/mo - Max mortgage payment under GDS:
$4,550 − $650 = $3,900 - Max mortgage payment under TDS:
$5,133 − $650 − $500 = $3,983 - Binding: GDS (smaller). Max payment =
$3,900/mo - Inverting at qualifying rate 6.99% / 25y: max principal ≈
$555,400 - Max home price:
$555,400 + $100,000 = $655,400
Increasing the down payment to $150,000 raises the maximum home price by exactly $50,000 (down payment increase) while leaving the max mortgage principal unchanged. Reducing other monthly debts to $0 would shift the binding ratio to GDS-only at the same $3,900 max payment (no change). Lengthening the amortization to 30 years (if eligible as FTHB or new build) would raise the max principal to roughly $610,000 — at the cost of approximately $170,000 in additional total interest over the life of the loan.
Frequently asked questions
How does affordability differ from the stress test?
The Stress Test calculator answers 'will this specific mortgage application pass?'. The Affordability calculator answers 'what is the largest mortgage that would pass?'. Mathematically it inverts the stress test: instead of computing GDS/TDS from a given principal and checking against the caps, it sets GDS/TDS at the caps (39% / 44%) and solves for the maximum principal.
Which ratio binds — GDS or TDS?
Whichever produces the smaller maximum mortgage. With low other-debt payments, GDS usually binds (housing costs max out at 39% before total debts reach 44%). With high other-debt payments (large car loan, credit card debt), TDS binds — the 44% cap is reached on total debts before the 39% cap on housing costs alone. The calculator labels which is binding so you can identify what to address.
Why does the calculator ask for property tax and heating estimates?
Both are part of GDS calculation per OSFI B-20: housing costs include not just the mortgage but property tax (varies 0.6%–2.5% of home value annually depending on municipality) and heating. A precise affordability number requires estimates of these. Most Canadian affordability calculators (Ratehub, RBC) take the same approach. For a rough first pass, use 0.8% of expected home price for property tax and $1,500–$2,500/year for heating.
Does this calculator include CMHC mortgage insurance?
No. The result is the maximum mortgage PRINCIPAL the borrower can carry. If the down payment is under 20% of the resulting home price, CMHC insurance is required and adds 0.6%–4% to the loan principal. The CMHC premium reduces the borrower's headroom against the stress-test caps. For a mortgage near the high-ratio threshold, run the CMHC Insurance calculator with the result here, then re-run this affordability calculator with the new effective loan amount.
What's the maximum amortization for affordability purposes in 2026?
Per OSFI and CMHC rules effective December 15, 2024: insured high-ratio mortgages cap at 25 years for most buyers, with a 30-year exception for first-time buyers and for any buyer purchasing a newly built home. Insurable low-ratio mortgages cap at 25 years. Uninsured mortgages can extend further at lender discretion (typically 30–35 years). Lengthening the amortization REDUCES the per-period payment, which in turn INCREASES the maximum principal that satisfies the stress test — but at the cost of substantially more total interest over the life of the loan.
Why do my results differ from a bank's pre-approval letter?
Bank pre-approvals often include lender-specific overlays beyond the OSFI minimums: stricter ratio caps for borrowers with imperfect credit, additional buffers for variable-rate mortgages, or deductions for irregular income. This calculator computes the OSFI-minimum bound — the maximum any federally-regulated lender could approve under B-20. Your specific lender may approve less, never more.
What inputs should I adjust to increase affordability?
Inputs that increase the maximum mortgage at fixed income: more down payment (raises the max home price by the same dollar amount), longer amortization (lower monthly payment → larger principal at the same payment), lower other-debt payments (removes pressure from TDS), lower property tax / heating (rare but moving to a less-taxed municipality matters). Inputs that have NO effect on the calculator output: the contract rate of the loan only matters via the qualifying rate, which is dominated by the 5.25% floor at low contract rates.
Sources
Every figure on this page traces back to a primary Canadian authority. See the complete sources index for the master list.
- OSFI Guideline B-20 (Residential Mortgage Underwriting) Office of the Superintendent of Financial Institutions · last verified
- Bank of Canada — Interest rates Bank of Canada · last verified
- CMHC Mortgage Loan Insurance Cost Canada Mortgage and Housing Corporation · last verified
Verified against OSFI Guideline B-20 + Ratehub and RBC affordability calculators on .
Important
This calculator is for informational purposes only. It is not financial, tax, mortgage, or legal advice. Tax rates, mortgage rules, and contribution limits change. Always verify current rules with the relevant Canadian authority and consult a licensed professional before making financial decisions.