How Much Can I Afford?

Canadian lenders use two ratios to decide how much you can borrow: GDS (housing costs vs income) and TDS (all debts vs income). Both are stress-tested at the higher of your contract rate plus 2% or 5.25%. This calculator runs those exact calculations.

Updated July 2026

What This Calculator Shows You

Put in your income, your monthly debt payments, your down payment and your credit range. The calculator gives you three things:

• The two ratios lenders actually use. Not a rule of thumb about income multiples. The real math a lender runs on your file.
• A monthly cost breakdown. Mortgage, property tax, heat, the whole picture, not just the mortgage payment people quote at each other.
• What you qualify for at different rates. This is the one to pay attention to. Move the rate a point and watch what happens to your number.

Here is what it cannot tell you, and it is the thing that decides most files: whether a lender will count your income the way you count it.

Salaried and hourly with a couple of years of history, mostly straightforward. Self employed, commissioned, part time, seasonal, contract, new to the country, child support, rental income, a new job in the same field? Every one of those gets treated differently, and the treatment changes from lender to lender. That is not a small footnote. It is often the whole deal.

How Lenders Actually Decide, in Alberta

Three things drive the answer.

1. The stress test. You do not qualify at your rate. You qualify at the greater of your contract rate plus two percent, or 5.25 percent. So if you are offered something in the fours, you are being tested in the sixes. That single rule shrinks what most people can buy, and it catches almost everybody by surprise the first time.

2. Your GDS ratio. Gross Debt Service. Your housing costs as a share of your gross income, using that stress tested payment, plus property taxes, heat, and half your condo fees if you have them. On insured mortgages the ceiling is generally 39 percent.

3. Your TDS ratio. Total Debt Service. Everything in GDS plus every other payment you make. Car loan, truck payment, credit cards, line of credit, student loans, support payments. On insured mortgages the ceiling is generally 44 percent.

4. Which lender you are standing in front of. This is the one nobody at a branch will tell you, and it is the reason two people with identical files get different answers.

Those 39 and 44 numbers are the insured-mortgage ceilings. They are not the only ceilings that exist. Depending on the lender and the strength of the file, ratios can stretch well past that, and on the alternative side they can go a great deal higher again. Some lenders will look past debt servicing ratios almost entirely when there is a strong asset base behind the borrower.

A bank has one set of ratios. If your file does not fit, the answer is no, and the conversation is over. I have access to more than twenty lenders, each with their own guidelines, their own tolerance, and their own appetite. Part of my job is knowing which door your file should be walked through in the first place, because sending a stretched file to the wrong lender turns a workable deal into a decline.

So if a number came back low somewhere else, that is one lender's ceiling. It is not the ceiling.

What Most People Get Wrong

They think debt only matters a little. It matters enormously, and it is the fastest lever you have. TDS counts the monthly payment, not the balance. A vehicle payment can quietly cost you a large chunk of purchase price. Paying out one loan before you apply sometimes does more for your approval than a raise would.

They confuse a pre-qualification with a pre-approval. A pre-qualification is a conversation and an estimate. A pre-approval means documents were actually reviewed. Walking into an offer with the first one and thinking you have the second is how people get hurt in a competitive market.

They treat the maximum as the target. The number a lender approves is the most they will lend, not the amount you should spend. It does not know about your kids activities, your travel, your truck repairs, or the fact that you want to sleep at night. Buy the payment you want to live with, not the one you barely qualify for.

They forget where the down payment has to come from. Lenders verify the source, usually over ninety days. Savings, investments, a documented gift from family, and certain registered plan withdrawals are fine. Money that appears out of nowhere, or a down payment borrowed on a line of credit, causes problems. Start the paper trail early.

They celebrate too early and buy the furniture. This one breaks hearts, and I understand exactly why it happens. You are approved, you are excited, and you go furnish the place. New couch, appliances, a big screen, maybe a truck to haul it all. Here is the problem: lenders often re-check your credit right before funding. If your balances have jumped, your ratios have changed, and an approval can be pulled days before possession. Buy the furniture after you have the keys. Every time.

They assume too much debt means an automatic no. It often does not, and this is where an experienced broker earns their keep. If debt servicing is the problem, we do not necessarily need those balances cleared before you apply. We can structure the approval so the lender conditions it: certain debts must be paid out prior to funding. The payout then comes out of the proceeds at closing. Same borrower, same income, same debts, but now the file works. A lot of people are told no when what they actually needed was that condition written into the approval.

They forget closing costs. Legal fees, title insurance, adjustments, moving. Budget for them separately. Nothing sours a purchase like being house rich and cash empty on possession day.

A Real Scenario

Frequently Asked Questions

Q: How much down payment do I actually need?
The minimum is five percent on the first five hundred thousand dollars of the purchase price, ten percent on the portion between five hundred thousand and one and a half million, and twenty percent at one and a half million and up. Under twenty percent down means mortgage default insurance, and that premium gets added to your mortgage.

Q: Why does the calculator say I qualify for less than I expected?
Usually one of three reasons. The stress test is qualifying you at roughly two percent above your actual rate. Your monthly debt payments are eating into your TDS ratio. Or property taxes and heating costs are larger in the calculation than you assumed. Change the rate field and watch the number move, and you will see how sensitive it is.

Q: Does paying off my car really increase what I can buy?
Often significantly. Debt service ratios count the monthly payment, so removing a payment frees room for mortgage payment. Whether it is the right move depends on how much cash it takes and whether that cash was earmarked for your down payment. Run both versions before you decide.

Q: I am self employed. Will I qualify for less?
Not necessarily, but you will be assessed differently. Most lenders look at your net income after write offs, not your gross revenue, which is why business owners are often surprised. There are lenders with programs specifically for self employed borrowers that look at the business more sensibly. This is exactly the kind of file where shopping lenders matters.

Q: Do I have to pass the stress test when I renew?
Not if you stay with your current lender. And since late 2024, uninsured borrowers doing a straight switch to a new lender at renewal, with no change to the loan amount or amortization, are not re-tested either. That change made it far easier to shop your renewal instead of just signing what arrives in the mail.

Q: Can I buy furniture and appliances after I am approved?
Wait until you have the keys. Lenders frequently re-check credit shortly before funding, and new balances or a new loan can change your ratios enough to put the approval at risk. It happens more often than you would think, and it happens to careful people, because the excitement is real. Furnish the place after possession.

Q: I have too much debt to qualify. Is that the end of it?
Not necessarily. If debt servicing is what is holding the file down, an approval can often be structured with a condition that specific debts are paid out prior to funding, with the payout handled at closing. That single piece of structuring turns a lot of declines into approvals. It is one of the practical differences between a lender who only sells one product and a broker who arranges the file.

Q: Is a pre-approval a guarantee?
No. It is a lender saying that based on the documents reviewed, you look approvable at a certain amount, and it usually holds a rate for a set window. The property still has to qualify, and your situation has to stay the same. Do not change jobs, finance a vehicle, or run up credit between pre-approval and possession.

So What Do You Actually Do?

Use the number above as a starting point, not a verdict. Then get a real one, because a real number depends on how a specific lender treats your specific income, your credit, and the property you want to buy. Those three things move the answer more than anything you can type into a calculator.

Here is the thing. Finding out what you actually qualify for costs you nothing and takes one conversation. Finding out in the middle of an offer is a much worse time.

Want your real number?
Call or text 403-703-6847. To get you an answer quickly, have these ready: your last two pay stubs (or last two years of tax documents if you are self employed), a rough list of your monthly debt payments, and how much you have saved for a down payment.

Shawn Selanders is a RECA-licensed mortgage broker with Mortgage Architects, serving High River, Okotoks, Calgary, Foothills County and Southern Alberta since 1999.