Question 1

How does the Canadian mortgage affordability calculator work?

Accepted Answer

This calculator uses the official CMHC stress test methodology. It calculates the maximum home price where your Gross Debt Service (GDS) ratio stays at or below 39% and your Total Debt Service (TDS) ratio stays at or below 44%, qualified at the stress test rate (your rate + 2%, or 5.25%, whichever is higher).

Question 2

What is the mortgage stress test rate in Canada 2026?

Accepted Answer

The Canadian mortgage stress test rate is the higher of your contract rate plus 2%, or the Bank of Canada qualifying rate of 5.25%. For example, if your lender offers you 4.5%, your stress test rate is 6.5% (4.5% + 2%). You must prove you can afford mortgage payments at this higher rate.

Question 3

What is the GDS ratio for a mortgage in Canada?

Accepted Answer

The Gross Debt Service (GDS) ratio is the percentage of your gross monthly income that goes toward housing costs — mortgage payments (principal + interest), property taxes, and heating. Canadian lenders require the GDS ratio to be 39% or less. A higher GDS ratio means you may not qualify for the mortgage.

Question 4

What is the TDS ratio for a Canadian mortgage?

Accepted Answer

The Total Debt Service (TDS) ratio is the percentage of your gross monthly income that goes toward all debt payments — housing costs (as above) plus car loans, credit card minimum payments, student loans, and other debts. Canadian lenders require TDS to be 44% or less.

Question 5

When is CMHC mortgage insurance required in Canada?

Accepted Answer

CMHC mortgage insurance (also called mortgage default insurance) is required when your down payment is less than 20% of the home purchase price. The premium is 4% (5–9.99% down), 3.1% (10–14.99% down), or 2.8% (15–19.99% down) of the total mortgage amount. It is added to your mortgage and amortized over the mortgage term.

Canadian Mortgage Affordability Calculator

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Debt Ratios (Stress Test)