Ready to start looking for your dream home? Enter a few key details and the calculator will guide you in determining, with confidence, what house price may be within reach. Your browser does not support geolocation. Consider using another browser.
The first step in searching for your home is understanding how large of a mortgage you can afford. With a few inputs, you can determine how much mortgage you may be comfortable with and the potential price range of your future home. Learn more about factors that can affect your mortgage affordability. The amount you have saved for a down payment is also another important piece of information to help determine affordability.
Different property types have different fees and fixed costs. For example, when you purchase a house, you can pay property taxes but you need to manage your own maintenance. A condominium has condo fees and property taxes, but the condo fees may take care of the maintenance costs. Your annual income is the amount you earn before taxes, also known as the gross amount.
Your down payment affects the amount you can borrow to buy a home and the size of your payments. This will impact your monthly budget.
They then have 15 years to repay their RSP other conditions apply. Estimate your monthly expenses such as groceries, transportation, child care, insurance, shopping, media and regular contributions to savings. If you're buying a home with a spouse, partner, friend or family member, include their monthly expenses as well. If this amount is higher than your monthly income before taxes, please contact us to discuss your options.
Based on a purchase price of , here's what your mortgage loan payment, other housing costs and available cash would be:. Enter the purchase price that best suits your comfort level for your monthly budget. The term acts like a 'reset' button on a mortgage. Short term vs long term mortgage rates Source: Bank of Canada, 5-year mortgage rate.
When you purchase a house, there are a number of costs you'll need to put cash aside for in addition to your down payment. These costs depend on a number of factors including things like what kind of home you are buying i.
When determining the size of home you can afford, it's important to look at the long term horizon. The mortgage rate you pay today could be substantially different from the mortgage rates available when the time comes to renew your mortgage. The calculation below shows how much of your mortgage principal will be left at the end of the term.
Using this amount, below we calculate the corresponding mortgage payments at a variety of interest rates:. Below is a graph that displays the approximate values of competitive 5-year fixed mortgage rates since When you're looking to buy a home, it's handy to know how much you can afford. Being able to calculate an estimate of how much you're able to borrow is an important part of setting your budget. You also need to determine if you have enough cash resources to purchase a home.
The cash required is derived from the down payment put towards the purchase price, as well as the closing costs that must be incurred to complete the purchase. We can help you estimate these closing costs with the first tab under the mortgage affordability calculator above. Taken together, understand how large a mortgage you can afford to borrow and the cash requirements will help you determine what kind of home you should be on the look out for.
To learn more about mortgage affordability, and how our calculator works, have a read of the information below. The higher your mortgage affordability, the more expensive a home you can afford to purchase.
If the cost of housing relative to the average income in a city is high, it will be seen as a less affordable place to live.
There are many factors that will affect the maximum mortgage you can afford to borrowincluding the household income of the applicants purchasing the home, the personal monthly expenses of those applicants car payments, credit expenses, etc. How much you can afford to spend on a home in Canada is most determined by how much you can borrow from a mortgage provider.
That is unless you have enough cash to purchase a property outright, which is unlikely. Use the above mortgage affordability calculator above to figure out how much you can afford to borrow, based on your current situation. You can change your amortization period and mortgage rate, to see how that would affect your mortgage affordability and your monthly payments.
There is a rule of thumb about how much you can afford, based on the calculations your mortgage provider will make. This rule is based on your debt service ratios.
Lenders look at two ratios when determining the mortgage amount you qualify for, which generally indicate how much you can afford. They take into account your income, monthly housing costs, and overall debt load. The first affordability guideline, as set out by the Canada Mortgage and Housing Corporation CMHC , is that your monthly housing costs — mortgage principal and interest, taxes, and heating expenses P.
For condominiums, P. The sum of these housing costs as a percentage of your gross monthly income is your GDS ratio. In addition to housing costs, your total monthly debt load would include credit card interest, car payments, and other loan expenses. The sum of your total monthly debt load as a percentage of your gross household income is your TDS ratio.
Our mortgage calculator uses these maximum limits to estimate affordability. The CMHC changes will have minimal impact on borrowers as GenWorth Financial and Canada Guaranty, the two other mortgage insurance providers in Canada, did not change their maximum limits. Your down payment is a benchmark used to determine your maximum affordability.
Ignoring income and debt levels, you can determine how much you can afford to spend using a simple calculation. The maximum home price you could afford would be:. In addition to your down payment and CMHC insurance, you should set aside 1. Many home buyers forget to account for closing costs in their cash requirements.
In addition to your debt service ratios, down payment, and cash for closing costs, mortgage lenders will also consider your credit history and your income when qualifying you for a mortgage. All of these factors are equally important. For example, even if you have good credit, a sizeable down payment, and no debts, but an unstable income, you might have difficulty getting approved for a mortgage.
To get the most accurate picture of what you qualify for, speak to a mortgage broker about getting a mortgage pre-approval. Should I refinance? How much do I need for my first down payment? Can we afford a bigger space? It's natural to have a lot of questions when it comes to buying a home or refinancing.
Thankfully, our team of mortgage advisors can help you every step of the way. Get advice however, wherever and whenever you want — in person, virtually, or on the phone. Paid and Presented By:. About this.
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