Two rules decide it: the stress test (you must qualify at the higher of your rate + 2% or 5.25%) and lender debt-service limits (housing near 39% of income, total debts near 44%). Estimate your number with the affordability calculator, then check insurance in the CMHC insurance calculator.
Your maximum mortgage is set by your income and debts through the GDS (≈39%) and TDS (≈44%) ratios, and by the stress test — you must show you could afford payments at the higher of your contract rate + 2% or 5.25%. More income and a bigger down payment raise the number; existing debts lower it.
Federally regulated lenders must qualify you at a minimum qualifying rate — the greater of your contract rate plus 2 percentage points, or 5.25%. So if you're offered 4.45%, you must qualify as though the rate were 6.45%. If you're offered 3.10%, the floor of 5.25% applies. The test proves you could keep paying if rates rose.
One 2024 change: insured mortgage holders switching lenders at renewal are no longer re-tested, and OSFI removed the stress test at renewal for uninsured borrowers switching federally regulated lenders. The test still applies to new purchases and most refinances.
| Ratio | What it includes | Typical limit |
|---|---|---|
| GDS (Gross Debt Service) | Mortgage + property tax + heat + half of condo fees, as a share of gross income | ≈ 39% |
| TDS (Total Debt Service) | Everything in GDS plus car loans, credit cards, lines of credit and other debt payments | ≈ 44% |
Your lender takes your gross income, applies the GDS and TDS caps to find how much monthly payment you can carry, subtracts your existing debts, then works backward from the stress-test qualifying rate to a maximum mortgage. Add your down payment to get a maximum home price. Our affordability calculator does exactly this — enter income, down payment, monthly debts and a rate to see your estimated maximum.
Remember the down-payment rules and insurance also shape what you can buy: the minimum down payment (5% / 10% / 20% tiers), the insurance premium if you're under 20% down, and the $1.5M insured cap.
Household income $120,000, $100,000 saved, $500/month of other debt, offered 4.45%:
Get the exact figure in the affordability calculator. Illustrative — verify with a lender.
It raises your maximum home price (down payment + mortgage) and can lower your insurance premium, but the mortgage itself is still capped by your income via GDS/TDS and the stress test.
Yes. Car loans, credit cards and lines of credit all count in TDS, so paying them down before applying can meaningfully increase the mortgage you qualify for.
Yes. The minimum qualifying rate is the higher of your contract rate + 2% or 5.25%. With today's rates the "+2%" figure is usually the binding one.