Small piggybank on top of stacks of cash. Mortgage affordability calculator

Affordability calculator

When searching for a new home, it’s important to figure out how much you can afford. This calculator takes the most important factors like your income and expenses and determines the maximum purchase price that you could qualify for.

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Mortgage dictionary

The mortgage industry is full of complex and unfamiliar terms, so we created this resources to help translate even the most difficult mortgage terms into plain everyday language.


Down payment

Mortgage Insurance

Mortgage Principal


Prime rate

Payment frequency

Prepayment/Lump Sum Payment

Amortization Period

Mortgage Term

Maturity Date

Mortgage Renewal


Home Equity

Gross Debt Service (GDS) Ratio

Total Debt Service Ratio (TDSR)

Mortgage Pre-Qualification

Mortgage Pre-Approval

Qualifying Rate

Fixed-rate Mortgage

Variable-rate Mortgage

Adjustable-Rate Mortgage (ARM)

Trigger Rate

Land Transfer Tax

Closing costs

Affordable mortgage rates the way you want them

Discover how much you can afford to borrow for your dream home.

Buying a house is a significant decision, and figuring out how much mortgage you can afford is a critical step in this process. Our Mortgage Affordability Calculator is designed to help you determine the size of the home loan that's right for you.

Here’s how it works:

  1. Income Information: Enter details about your gross annual income, including any bonuses or additional income you may have. This information will help us understand your financial standing. This means income before any taxes or deductions, not your take-home pay.
  2. Monthly Debts: Include your monthly obligations such as credit card payments, car loans, student loans, or any other debts. Remember, the lower your debt-to-income ratio, the higher the mortgage amount you can afford. Keep in mind that these obligations are monthly, so you made need to divide the total obligation amount by 12 if that is a yearly number.
  3. Monthly housing expense: Input the expected condo fees, property taxes and heating fees of the property that you are thinking about. If it’s not a condo, you can leave the condo fees blank. The higher these expenses are, the less that you can afford.
  4. Down Payment: The amount you plan to put down can dramatically affect how much house you can afford. The larger your down payment, the less you'll need to borrow.
  5. Interest rate: Our calculator will pull in the best mortgage rate that can fit your situation from our live mortgage rates. No need to worry about figuring out which current interest rate to use.

Once you have filled in these details, the information within the ‘Your results’ section will accurately portray your scenario and provide you with your estimated monthly mortgage payment, a total mortgage amount that you can qualify for and the home value that you can afford. You may notice that our calculator results may be lower than some other calculators you may find. This is because our rates are live and rates have been increasing, affordability is decreasing. Also, we wanted to provide a more realistic tool so that when you apply for a mortgage, you won’t run into any surprises.

Remember, this calculator is a guiding tool and gives you an estimate. Actual mortgage approvals can vary based on various factors such as credit score, employment history, and market conditions. We recommend consulting with a mortgage advisor to understand your options better.

Pave the way to your dream home with our Mortgage Affordability Calculator. Start planning for your future today!

What you need to know about down payments

A down payment is a substantial aspect of mortgage affordability and plays a critical role in your homeownership journey. It is the initial upfront portion that you pay while buying your home. This payment directly reduces the amount of your mortgage loan, affecting both your monthly mortgage payments and the total cost of your home over time.

Will down payment size impact Mortgage Affordability?

The size of your down payment has a significant impact on your mortgage affordability. Here's how:

  1. Lower Loan Amount: A larger down payment means you'll need to borrow less money, which can make your home loan more affordable in the long run.
  2. Reduced Monthly Payments: The amount you put down directly influences your monthly mortgage payments. The more you pay upfront, the lower your monthly payments will be.
  3. Better Mortgage Rates: Lenders often offer better interest rates to borrowers who can make a substantial down payment. Lower interest rates can make your mortgage more affordable over the life of the loan.

What are the benefits of a Larger Down Payment?

Here are a few more reasons why a larger down payment can be beneficial:

  1. Equity Building: A larger down payment allows you to start with more equity in your home, providing you with more financial stability.
  2. Avoiding Mortgage Insurance: If you can put down 20% or more, you can often avoid paying mortgage insurance, a type of insurance that protects your lender if you stop making payments on your loan.

What are the main sources of Down Payment?

There are several places where your down payment can come from, including personal savings, investment accounts, retirement funds, and monetary gifts from family. However, each of these sources may have implications for your loan approval process and potential tax considerations.

Deciding on the right down payment amount is a balance between what you can afford to pay upfront and what you can afford to pay on your mortgage each month. Using our Mortgage Affordability Calculator, you can determine the impact of different down payment amounts on your overall loan affordability.

All you need to know about different types of Home Loans

When considering a mortgage, it's crucial to know that there are several types of home loans available. Each type comes with its own set of terms, interest rates, and can affect your mortgage affordability differently. Here are a few common types in Canada:

  1. Fixed-Rate Mortgage: This is the most traditional type of mortgage. With a fixed-rate mortgage, the interest rate remains the same throughout the entire loan term. This provides the security of consistent monthly payments, which can simplify budgeting.
  2. Variable-Rate Mortgage: A variable-rate mortgage fluctuates with the lender's prime rate. This means your payments can vary over the life of your mortgage as the prime rate changes. Often, variable-rate mortgages offer lower initial rates compared to fixed-rate mortgages, but there's a risk your rate could increase in the future.
  3. Adjustable-Rate Mortgage: Similar to variable-rate mortgages, the interest rate of an adjustable-rate mortgage can change over time. However, unlike a variable-rate mortgage where your payment amount stays the same while the portion applied to the principal varies, an adjustable-rate mortgage will change your actual mortgage payment.
  4. Conventional Mortgage: This type of mortgage requires a down payment of at least 20% of the home's purchase price. Conventional mortgages may provide more favorable interest rates since the lender's risk is reduced.
  5. High Ratio Mortgage: High ratio mortgages are those where the borrower's down payment is less than 20% of the home purchase price. These mortgages need to be insured through organizations like Canada Mortgage and Housing Corporation (CMHC), Genworth Financial, or Canada Guaranty.

Choosing the Right Mortgage Type for you

The best mortgage type for you largely depends on your financial situation and long-term plans. If you plan to stay in the house for a long time and prefer consistent payments, a fixed-rate mortgage could be the best choice. If you're comfortable with some interest rate risk or are planning to move in a few years, a variable or adjustable-rate mortgage might be more appropriate.

Remember, the type of mortgage you choose can significantly impact your monthly payments and overall loan affordability. Therefore, it's crucial to carefully consider your options and consult with a mortgage advisor if needed.

What are Gross Debt Service and Total Debt Service Ratios?

In Canada, two important calculations used by lenders to assess your ability to afford a mortgage are the Gross Debt Service (GDS) ratio and the Total Debt Service (TDS) ratio.

Gross Debt Service (GDS) Ratio

Your GDS ratio is the percentage of your gross annual income needed to cover all housing costs. These costs include:

  • Annual mortgage payments
  • Property taxes
  • Heat expenses
  • 50% of condominium fees (if applicable)

A GDS ratio of 39% or less is generally considered acceptable, indicating that you have a healthy balance between income and housing costs.

Total Debt Service (TDS) Ratio

The TDS ratio is a comprehensive measurement that includes all housing costs in the GDS ratio, plus other debt payments such as:

  • Car loans or leases
  • Credit card payments
  • Student loans
  • Personal loans

An acceptable TDS ratio is typically 44% or less. This ratio assures lenders that you have sufficient income to cover both your housing costs and other debt obligations comfortably.

Improving Your GDS and TDS Ratios

Here are a few strategies to improve your GDS and TDS ratios:

  1. Pay Down Debts: Reducing your current debt levels can lower your TDS ratio, making you a more attractive candidate for lenders.
  2. Increase Your Down Payment: By increasing your down payment, you decrease the size of your mortgage, thereby lowering your GDS ratio.
  3. Increase Your Income: Boosting your income, whether through a raise, a new job, or additional part-time work, can improve both your GDS and TDS ratios.

Remember, even if your GDS and TDS ratios meet the standards, it's essential to consider whether you can comfortably afford your monthly payments, given your lifestyle and financial goals.

The Role of Your Credit Score

Your credit score is a numerical representation of your creditworthiness, which is an integral part of the mortgage approval process in Canada. It gives lenders insight into how you've managed your debts and helps them determine the risk associated with lending to you.

How to read your credit score

Credit scores in Canada range from 300 to 900, with a higher score indicating a better credit history. The score is calculated based on various factors including:

  • Payment history: Timely payment of bills and debts positively impacts your credit score.
  • Credit utilization: This is the ratio of your credit card balances to your credit limits. Lower utilization generally contributes to a higher credit score.
  • Length of credit history: A longer credit history can positively affect your score.
  • New credit inquiries: A large number of inquiries can negatively impact your credit score.

How Your Credit Score Affects Your Mortgage

  1. Mortgage Approval: Lenders use your credit score as a factor to decide whether or not to approve your mortgage application. A low score might indicate to lenders that lending to you could be risky.
  2. Interest Rates: A higher credit score might qualify you for lower interest rates on your mortgage. Even a small reduction in the interest rate can result in significant savings over the life of your loan.
  3. Loan Amount: A better credit score can also potentially influence the amount a lender is willing to loan you.

How do you improve your Credit Score?

Here are some strategies to improve your credit score:

  • Make sure you pay your bills on time. Late payments can significantly lower your credit score.
  • Try to reduce the amount you owe, especially on credit cards.
  • Limit the number of new credit applications.

Understanding the role of your credit score in the mortgage process can help you better prepare for homeownership. In the next section, we will delve into the additional costs associated with owning a home beyond the mortgage, which can impact your overall affordability.

Additional Homeownership Costs

When planning for homeownership, it's essential to understand that the costs of owning a home extend beyond just the mortgage payments. Various other expenses associated with homeownership can impact your overall affordability. Here are some to consider:

What are closing costs?

Closing costs are the legal and administrative expenses you pay when closing your home purchase. These are typically between 1.5% and 4% of the home's purchase price and may include:

  • Legal fees and disbursements
  • Land transfer taxes
  • Home inspection fees
  • Property appraisal
  • Mortgage default insurance (if applicable)
  • Title insurance

Property Taxes

As a homeowner, you will be required to pay property taxes to your municipality. The amount varies depending on the value and location of your property.

Home Insurance

Home insurance is crucial for protecting your home and personal property against damage and theft. The cost of your policy will depend on your coverage level, location, the home's value, and other factors.

Maintenance and Repairs

Routine maintenance and unexpected repairs are part of homeownership. While these costs can vary widely, a common rule of thumb is to budget 1% to 2% of your home's value per year for maintenance.


Don't forget to factor in the cost of utilities such as electricity, water, heating, and internet. If you're moving from an apartment to a larger home, these costs may increase.

Condominium Fees

If you are buying a condominium, you'll likely have to pay monthly condo fees. These cover the cost of maintaining common areas and the building's exterior.

Understanding these additional costs is an important part of planning for homeownership and can help ensure you are financially prepared. Keep these expenses in mind as you use our Mortgage Affordability Calculator to plan for your future home. In the final section, we will provide some tips and strategies to improve your overall mortgage affordability.

Pre-Approval Process

The mortgage pre-approval process is an important step in your home-buying journey in Canada. It gives you a clear understanding of how much you can afford and can make you a more attractive buyer to sellers. Here's a closer look at this process:

What you need to know about the Pre-Approval Process

During the pre-approval process, potential lenders will look at your financial situation to determine how much they are willing to lend you. They will evaluate your income, debt levels, credit score, and other relevant financial information.

Upon completion, you'll receive a conditional commitment in writing for a specific loan amount. This pre-approval typically lasts for 60-120 days, although the duration can vary depending on the lender.

What are some benefits of Getting Pre-Approved?

  1. Know Your Budget: A pre-approval tells you exactly how much you can borrow, which helps narrow down your home search to properties within your price range.
  2. Rate Lock: Some lenders offer a rate lock with their pre-approvals, meaning they guarantee the interest rate for a specific period. This can protect you if interest rates rise while you're house hunting.
  3. Stronger Negotiation Power: Sellers often prefer buyers who have pre-approvals because it shows them you're financially ready to purchase the home. This can give you an edge in competitive markets.

Navigating the Pre-Approval Process

  1. Check Your Credit: Before applying for pre-approval, check your credit score. This will give you an idea of your credit standing and alert you to any errors that need correcting before lenders check your credit.
  2. Prepare Your Documents: You'll need to provide various documents during the pre-approval process, such as proof of income, bank statements, and information on any debts you owe. Preparing these documents in advance can make the process smoother.

Remember, getting pre-approved doesn't guarantee you will get the mortgage, as the lender will need to verify your financial information and conduct an appraisal once you're ready to purchase a specific home. But, it's a significant first step showing how much the lender might be willing to lend you.

Mortgage Statement

Calculation results and mortgage rates shown are approximations and dependent on the data you have provided. They are for illustration purposes only and are not intended to provide financial advice. Pine does not make any representations or warranties with respect to the calculation results. Rates quoted are not considered as rate guarantees. Pine may offer different rates when you apply for your mortgage if any of the provided details differ, if rates have changed. In some instances, rates may also vary based on your credit or payment history. Additional terms and conditions may apply.

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