The bank tells you what you qualify for. This tells you what you can actually afford, after tithing, saving, and leaving margin to breathe.
What this changes
What the bank will lend you→What you can carry after giving and saving
The bank's number is a ceiling. This one starts with what comes off the top of your pay and works down to a price you can carry.
Enter your actual situation to see your GDS and TDS ratios.
A one-tap starting point. Every field below is still yours to change.
Your Income
$
$
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Affects the income tax calculation in your monthly breakdown.
Housing Details
$650,000
$
$130,000
$
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%
A 30-year amortization is available on uninsured mortgages with 20% or more down, and on insured mortgages for first-time buyers and new builds, where it adds 0.20% to the premium. Confirm the details with your lender.
Monthly Costs (used in GDS ratio)
$
Typical range: $300 to $700/mo. Check your municipality. Roughly 0.6% to 1% of home value annually.
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Most lenders use $150 to $200/month as a default estimate.
$
50% of condo fees are included in the GDS calculation.
Other Monthly Debts
Added to housing costs for the TDS ratio. Leave at 0 if not applicable.
$
$
$
$
$
Your Priorities
The bank ignores these. You shouldn't.
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%
Your Affordability Summary
GDS Ratio (max 39%)--
TDS Ratio (max 44%)--
TDS equals GDS when you have no other monthly debts.
Maximum Home Price at Each Threshold
Bank Maximum
--
GDS 39% limit
Conservative
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GDS 28% target
Wise & Faithful
--
After tithe & savings
Based on 35% of your take-home income once tithe and savings are set aside, with income tax for your province already taken off.
Monthly breakdown based on your Wise & Faithful maximum price (your maximum). Adjust your income, down payment, or priorities to see how it changes.
Monthly Budget Breakdown
Gross Monthly Income--
Income Tax, CPP & EI--
After-Tax Monthly Income--
Tithe / Giving (% of gross)--
Savings (% of gross)--
Remaining (after tax, tithe & savings)--
Mortgage Payment--
Property Tax--
Heating--
Condo Fees (50% in GDS)--
Other Debt Payments--
Total Housing & Debt--
Left for Everything Else--
Your Numbers, Drawn to Scale
The gold segment is your down payment; the green is the mortgage. Each bar is one ceiling: the bank maximum, a careful target, and your Wise and Faithful maximum, all drawn to the same scale.
GDS and TDS Explained
Gross Debt Service (GDS)
Your monthly housing costs (mortgage payment, property tax, heating, and 50% of condo fees) divided by gross monthly income. Must be 39% or less to qualify.
Total Debt Service (TDS)
All monthly housing costs plus all other debt payments (car, student loans, credit cards, lines of credit) divided by gross monthly income. Must be 44% or less.
The honest problem with these ratios: The bank's maximum does not account for tithing, retirement savings, emergency funds, children, or any margin for life. A GDS of 39% is the cliff edge a lender will let you stand on. Aim well below it.
The Stress Test
To get a mortgage in Canada, you must qualify at a rate higher than what you'll actually pay. This is the mortgage stress test, required by OSFI since 2018.
Contract Rate
Stress Test Rate
Rule Applied
3.0%
5.25%
Floor rate
4.0%
6.0%
Rate + 2%
4.84%
6.84%
Rate + 2%
5.5%
7.5%
Rate + 2%
The stress test exists to ensure you can still afford your mortgage if rates rise. It reduces borrowing power by roughly 20% compared to qualifying at the contract rate.
Tools Dan uses
Start the down payment
The gap between renting and owning is a savings runway. Wealthsimple opens an FHSA in minutes, no minimum, and every dollar toward the down payment grows tax-free.
The standard rules are: your housing costs (mortgage payment, property tax, heat and half of any condo fees) stay at or below 39% of gross monthly income, the GDS ratio, and your total debt payments including housing stay at or below 44%, the TDS ratio. Those are the limits for an insured mortgage, and a lender applies them at the stress-test rate rather than the rate you will pay.
What is the mortgage stress test in Canada?
The stress test requires that you qualify at the higher of your actual mortgage rate plus 2%, or 5.25%. This means if you are offered a 5% mortgage rate, you must qualify as though the rate were 7%. It is designed to ensure you can handle rate increases.
How much do I need for a down payment in Canada?
Minimum 5% on homes under $500,000. On homes between $500,000 and $999,999, the minimum is 5% on the first $500,000 and 10% on the amount above that. On homes at $1 million or more, the minimum is 20%. A down payment under 20% requires CMHC mortgage insurance.
What are closing costs in Canada?
Budget roughly 1.5-4% of the purchase price for closing costs, including land transfer tax (which varies by province), legal fees ($1,500-$3,000), title insurance, home inspection, and other administrative costs. Ontario and Toronto have provincial and municipal land transfer taxes that add significantly to the total.
Is buying a home always a good investment?
Not necessarily. Whether buying beats renting depends on local price-to-rent ratios, your time horizon, transaction costs, and your opportunity cost if that down payment were invested instead. Use the rent vs. buy calculator alongside this one for a more complete picture.
Free: The Steward's Map
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