Calculator
What can you actually afford?
Lenders do not ask what you would like to spend. They apply two ratios to your income, your debts and the stress-test rate. This does the same arithmetic.
Not yet verified. The lending ratios and stress-test assumption used here have not been checked against current guidelines by this build. The explanations are written for this site and each links to the official source. Confirm anything you intend to rely on, and take advice from a lawyer or accountant before acting on it.
- Estimated maximum price
- Mortgage this supports
- Monthly payment at that price
- Limited by
- Minimum down payment required
An estimate, not a pre-approval. Lenders also assess credit, employment history and the property itself, and qualify you at a stress-test rate rather than your contract rate. Get a real approval before you offer.
The two ratios
Gross Debt Service compares housing costs, meaning mortgage payment, property tax, heat and half of any condominium fee, against your gross income. Total Debt Service adds every other debt payment: car loans, lines of credit, student loans and the minimum on your credit cards. Lenders apply both and the lower answer wins.
The stress test
You are qualified at the greater of the benchmark qualifying rate or your contract rate plus two percent, not at the rate you will actually pay. That gap is why the number below is lower than a naive calculation suggests, and it is deliberate.
What this leaves out
Closing costs are not part of the mortgage. Land transfer tax, legal fees and adjustments come out of cash on top of the down payment.