Your Income

How Much Home Can I Afford With My Income?

In this market, banks almost always use income to ensure mortgage affordability, regardless of the amount of down payment. How they calculate affordability varies from lender to lender — but for the most part, four times your gross income is considered a good rule of thumb.

To answer the affordability question a little more precisely depends on a number of factors. The most important factors to consider are:

  • Your gross household income
  • Your down payment
  • Mortgage interest rate

Lenders will also consider your assets and liabilities. Your lifestyle and debt comfort zone should also factor in.

To find your maximum mortgage amount, the calculation is based on two simple rules that lenders use to determine how much of a mortgage you can afford:

  • Your monthly housing costs should not exceed 39% of your gross monthly household income (this can be up to 40% with some banks). Housing costs include monthly mortgage payments, taxes and heating expenses. If applicable, this sum should also include half of the monthly condominium fees.
  • Your entire monthly debt load should not be any more than 44% of your gross monthly income. This includes housing costs, and other debts, such as car payments, personal loans, and credit card payments.

Note: Rules and guidelines are subject to change. Please inquire within. ​​