How Much Home Can You Afford?

Use our handy calculator for a rough idea of your home price comfort-zone.

How does your income and debt-load impact your numbers? How can you increase your mortgage affordability? We help you find the answers.

What can you afford?

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For the house you can afford, save money and time — with us.

Try out our Affordability Calculator for a quick idea of what size of home you may be able to afford. An estimate on how much you can borrow is an important part of setting your budget.

It's only a ballpark, though. The first step in getting your true numbers is to apply with us.

Once you provide a few details about your financial situation, our expert True North Mortgage brokers can outline your home-affordability situation, and offer advice on getting your best rate and right mortgage fit (in your preferred language) to help you save thousands.

What factors can affect your mortgage affordability?

Your maximum mortgage amount is usually determined by:

  • Size of your down payment
  • Your household income and expenses
  • Current debt obligations
  • Your credit rating
  • Mortgage rate that you qualify for (according to the latest federal stress-test regulations)
  • A pre-approval gives you more accurate numbers (vs a pre-qualification)
  • If you're a first-time home buyer, there may be programs and rebates available to help soften the financial blow

Here's our Mortgage Checklist for documents you may need to provide for your quick pre-approval.

We can help you look for a home that you can (responsibly) afford.

Our highly-trained True North Mortgage brokers will quickly help you get a solid idea of the price-ranges of homes or properties you can scope out.

And, you'll be able to hold your best rate (for which qualify) for up to 120 days, to help give you peace-of-mind while you look for the right home.

We make it easy — use our easy online application, call us, click on the chat bubble, or drop by one of our store locations.

Try out our other great tools:
Mortgage Payment Calculator
Compare & Save Calculator

Affordability Calculator FAQ's

How does my down payment affect my mortgage?

The size of your down payment has a direct impact on the size of mortgage loan you'll need, and may affect your monthly mortgage payment amount:

  • You may be able to get a mortgage with only 5% down payment (price restrictions apply)
  • Typically, a larger down payment can lower your mortgage loan amount, for lower mortgage payments
  • With less than 20% down (high-ratio mortgage), you'll need to pay for default insurance, which is typically added to your payments
  • With 20% down or more (conventional mortgage), you won't need default insurance, which may lower your payments
  • A conventional mortgage, however, may also incur a higher mortgage rate from lenders, which may impact your mortgage payment (make sure to get your best rate, through us!)

Related: Why a bigger down payment could result in a higher rate

How do I estimate my mortgage affordability?

Lenders look at two ratios when determining how much mortgage you qualify for:

  • Gross Debt Service ratio (GDS) — total monthly housing costs shouldn't be more than 39% of your gross household income
  • Total Debt Service ratio (TDS) — total debt load shouldn't be more than 44% of your gross household income

In addition, the federal stress test may impact the mortgage amount for which you'll be able to qualify. Regardless of what your actual mortgage rate will be, you'll need to prove that you can still afford your mortgage payments at a higher 'qualifying' interest rate (in case interest rates go up in the future).

How can I increase my mortgage affordability?

If you find that your numbers don't match what you're hoping for, there are some ways you may be able to increase the size of mortgage you can afford:

  • Make a bigger down payment — wait longer to save more, look at first-time home buyer programs, forego a holiday, or make use of any family monetary gifts
  • Increase your income — consider a side-hustle, rent out a spare room, negotiate a higher salary, upgrade for a better position, or find a job that pays better
  • Pay off your existing debts
  • Improve your credit score
  • Look into a longer amortization to lower your payments (depending on the lender)
Why do I need a mortgage pre-approval to look for a home or property?

When looking for a home or property, real estate agents and home sellers want to know that you're serious about purchasing. A pre-approval (vs a pre-qualification) is a written commitment from a lender (with conditions) that helps ensure you can afford the house or property that interests you. So, it prevents everyone, including you, from wasting time looking at or offering on homes that you may not be able to afford.

A pre-approval also allows you to hold your best mortgage rate for up to 120 days (depending on the lender).

Your pre-approval can take anywhere from a few minutes, up to two weeks for particular situations (such as for self-employed applicants). Our expert brokers can quickly help you have a pre-approval in hand when house-hunting.

Read more: Get Pre-Approved in Minutes

What is a mortgage pre-qualification?

A mortgage pre-qualification is a quick idea of what you may be approved at for a mortgage loan, based on a few financial numbers provided verbally without any supporting documents.

A pre-qualification may be useful when you first start thinking about owning a home, for budget purposes and to get to know the mortgage process.

However, if you're serious about looking for a home, we recommend a pre-approval, which is a conditional lender commitment for the size of mortgage you'll actually be able to get.

Read more: Get Pre-Approved in Minutes

It's easy to get your best mortgage.