Buyer's Guide
How Much Mortgage Can I Afford in Ontario?
Lenders work out what you can borrow from your income, your debts and your down payment — all tested at a higher "stress test" rate. Here's how it works in Ontario, with examples by income.
The Two Ratios That Decide Your Mortgage
Lenders compare your housing costs, then all your debts, to your gross income.
39%
GDS: housing costs vs gross income
44%
TDS: all debt payments vs gross income
- GDS countsThe mortgage payment at the qualifying rate, property tax, heat and half of any condo fees.
- TDS addsCar and student loans, lines of credit, card minimums and support payments. With other debts, TDS is often the limit.
These are the common limits for insured mortgages. Some lenders use lower targets, and some alternative lenders allow more, at a higher cost.
The Stress Test
With federally regulated lenders, you qualify at the greater of your contract rate plus 2% or 5.25%.
4.34%
example five-year fixed rate
+2%
stress-test buffer
6.34%
rate you qualify at
The test applies to fixed and variable mortgages alike, so a lower variable rate doesn't usually let you borrow more.
Worked Examples by Income
Same calculation as our affordability calculator, at today's example rate.
| Compare | $80,000 income | $100,000 income | $120,000 income | $150,000 income | $200,000 income | $100,000 income + $600/month debts |
|---|---|---|---|---|---|---|
| Down payment | $40,000 | $60,000 | $80,000 | $100,000 | $150,000 | $60,000 |
| Estimated max price | $373,000 | $478,000 | $584,000 | $734,000 | $1,000,000 | $454,000 |
| Mortgage (incl. insurance) | $343,000 | $431,000 | $520,000 | $654,000 | $874,000 | $406,000 |
| Monthly payment at 4.34% | $1,870 | $2,347 | $2,830 | $3,560 | $4,759 | $2,212 |
$80,000 income
- Down payment
- $40,000
- Estimated max price
- $373,000
- Mortgage (incl. insurance)
- $343,000
- Monthly payment at 4.34%
- $1,870
$100,000 income
- Down payment
- $60,000
- Estimated max price
- $478,000
- Mortgage (incl. insurance)
- $431,000
- Monthly payment at 4.34%
- $2,347
$120,000 income
- Down payment
- $80,000
- Estimated max price
- $584,000
- Mortgage (incl. insurance)
- $520,000
- Monthly payment at 4.34%
- $2,830
$150,000 income
- Down payment
- $100,000
- Estimated max price
- $734,000
- Mortgage (incl. insurance)
- $654,000
- Monthly payment at 4.34%
- $3,560
$200,000 income
- Down payment
- $150,000
- Estimated max price
- $1,000,000
- Mortgage (incl. insurance)
- $874,000
- Monthly payment at 4.34%
- $4,759
$100,000 income + $600/month debts
- Down payment
- $60,000
- Estimated max price
- $454,000
- Mortgage (incl. insurance)
- $406,000
- Monthly payment at 4.34%
- $2,212
Assumptions behind these examples
A 4.34% five-year fixed rate (lowest advertised rate as of October 23, 2026), stress-tested at 6.34%; 25-year amortization; property tax of about 0.75% of the price per year; $100/month heat; no condo fees; and no other debts unless shown.
Illustrative estimates only, not a pre-approval or a rate offer. Your actual numbers depend on your lender, your rate, your property and a full review of your income and credit.
What Lowers Your Number
- Other debt paymentsEvery monthly payment counts against TDS.
- Condo fees and property taxBoth count toward GDS.
- Variable or recent incomeLenders usually average two years of self-employment, commission or bonus income; new jobs may need to be past probation.
- Credit historyMissed payments or high card balances can limit you to fewer lenders.
- A small down paymentOn a higher-priced home, because the minimum rises above $500,000.
Your Down Payment Sets a Second Limit
Even if your income supports a larger mortgage, your down payment caps the price.
5%
of the first $500,000
10%
of the portion above, up to $1,500,000
20%
at $1,500,000 or more
With less than 20% down, a default insurance premium is added to the mortgage, and Ontario's 8% sales tax on that premium is due in cash at closing. See the down payment requirements guide.
Approved Isn't the Same as Affordable
Lender ratios ignore much of your real budget — childcare, transportation, savings and home repairs.
- Could you still cover the payment if your rate were 1% to 2% higher at renewal?
- Will you have cash left after closing for moving, furnishing and an emergency fund?
- Have you budgeted for maintenance — many owners set aside around 1% of the home's value a year?
- Does the payment leave room for the savings and spending you don't want to give up?
Plan for closing costs too: land transfer tax, legal fees, title insurance, inspection and adjustments. See mortgage closing costs in Ontario.
Ways to Increase What You Can Afford
- Pay down small debtsEspecially car loans and card balances, before you apply.
- Add a co-borrowerTheir income and debts are counted alongside yours.
- Save a larger down paymentIt also lowers or removes the insurance premium.
- 30-year amortizationFor first-time buyers: a lower payment, more total interest. See first-time home buyers in Ontario.
- Rental incomeA legal rental unit, or a 2–4 unit home you'll live in, lets a portion of the rent count.
Get Your Real Number
Try your own figures in the mortgage affordability calculator, then get a document-reviewed mortgage pre-approval before you view homes. It checks your income, debts and credit against real lender rules and can hold a rate while you shop.
Frequently Asked Questions
How much house can I afford on a $100,000 salary in Ontario?
Using this guide's assumptions — a 4.34% five-year fixed rate stress-tested at 6.34%, $60,000 down, no other debts and a 25-year amortization — the estimate is about $478,000. Car loans, student loans, condo fees and a different down payment all change that number, so run your own figures.
What is the 39/44 rule?
Lenders generally want your housing costs (mortgage payment at the qualifying rate, property tax, heat and half of any condo fees) at or under about 39% of gross income, and all debt payments combined at or under about 44%. These are the common limits for insured mortgages; some lenders use lower targets.
Does the stress test apply to me?
With federally regulated lenders, yes: you qualify at the greater of your contract rate plus 2% or 5.25%, for both fixed and variable mortgages. Some provincially regulated lenders, such as credit unions, set their own rules, and uninsured borrowers switching lenders at renewal without adding money are generally not re-stress-tested.
How much down payment do I need?
In Ontario the minimum is 5% of the first $500,000 and 10% of the portion above that, up to a $1,500,000 purchase price. At $1,500,000 or more the minimum is 20%. With less than 20% down you also pay mortgage default insurance.
Is my pre-approval amount what I can afford?
Not necessarily. A pre-approval tells you the most a lender may lend under its rules. What you can comfortably afford depends on your full budget — childcare, savings, repairs and how you'd handle a rate increase at renewal — which lender ratios don't fully capture.
Can rental income help me qualify?
Yes. If the home has a legal rental unit, or you're buying a 2–4 unit property and living in one unit, lenders can count a portion of the rent. The method and percentage vary by lender.