How the mortgage stress test works
Canadian lenders don't approve a mortgage based on the rate you'll
actually pay. Under the federal mortgage stress test, you have to
show you could still afford your payments at a higher
minimum qualifying rate: the greater of your
contract rate plus 2 percentage points, or 5.25%. At a 4.5%
contract rate, for example, you qualify at 6.5%. This calculator
applies that rule, then works out the largest home price your
income, down payment, and existing debts can support.
GDS and TDS: the two affordability limits
At the qualifying rate, two ratios must stay within their limits.
Your gross debt service (GDS) ratio is your
monthly housing costs — mortgage principal and interest,
property tax, heating, and half of any condo fees — divided by
your gross monthly income, and can be at most 39%. Your
total debt service (TDS) ratio adds every other
debt payment, such as car loans, student loans, and credit cards,
and can be at most 44%. Whichever limit you hit first sets your
maximum mortgage; the calculator tells you which one it was.
Down payment and mortgage insurance
The minimum down payment is 5% of the first $500,000 of the price
plus 10% of the portion above that, up to $1.5 million; at $1.5
million or more, you need 20% down. With less than 20% down, the
mortgage must carry default insurance, and the premium — 2.80%
to 4.00% of the loan depending on how much you put down, plus 0.20%
for a 30-year amortization — is added to the mortgage. Because
the premium makes the loan larger, it's included in the stress
test too. A bigger down payment can therefore raise your maximum
price by more than the extra cash itself.
What this calculator assumes
Payments are calculated monthly with semi-annual compounding, the
standard for Canadian fixed-rate mortgages. The 39% and 44% limits
are CMHC's limits for insured mortgages; individual lenders set
their own limits for uninsured mortgages, which may be stricter,
and may treat income, rental income, or debts differently. Treat
the result as an estimate of what you could qualify for, not a
pre-approval. Rules are current as of September 2026.
Already know the mortgage amount? The
mortgage calculator builds a full
amortization schedule and shows how extra payments shorten it.
Frequently asked questions
What is the mortgage stress test?
It's a federal rule that makes you qualify for a mortgage at a
higher interest rate than the one you'll actually pay: the greater
of your contract rate plus 2 percentage points, or 5.25%. It
applies to insured mortgages and to uninsured mortgages from
federally regulated lenders such as the big banks. Your actual
payments are still based on your contract rate -- the stress test
only decides how large a mortgage you qualify for.
What are the GDS and TDS ratios?
GDS (gross debt service) is your monthly housing costs -- mortgage
principal and interest at the qualifying rate, property tax,
heating, and half of any condo fees -- as a percentage of your
gross monthly income. TDS (total debt service) is the same plus all
your other debt payments. This calculator uses CMHC's limits for
insured mortgages, 39% GDS and 44% TDS, for every mortgage; an
individual lender may apply different or stricter limits,
especially for uninsured mortgages.
How does the calculator work out the maximum home price I can afford?
It finds the highest purchase price, to the dollar, where your down
payment still meets the minimum and both your GDS and TDS ratios
stay within their limits at the qualifying rate. When your down
payment is under 20% of the price, it adds the mortgage default
insurance premium to the loan before checking the ratios, the same
way a lender would.
What is the minimum down payment in Canada?
5% of the first $500,000 of the purchase price, plus 10% of the
portion between $500,000 and $1.5 million. Homes priced at $1.5
million or more can't be bought with an insured mortgage, so they
need at least 20% down.
Can I use a 30-year amortization?
With a down payment of 20% or more, the calculator allows 25 or 30
years. With less than 20% down, your mortgage must be insured, and
an insured mortgage can only be amortized over 30 years if you're a
first-time buyer or buying a newly built home -- and the insurance
premium is 0.20% higher. If you choose 30 years without checking
that box, the calculator uses 25 years whenever the down payment is
under 20%.
Is my information saved anywhere?
No. The calculator has no database and no accounts -- your numbers
are sent to the calculation service only to compute a result and
are not stored.