How Much Home Can I Afford?

Your Estimate

You may qualify for a home up to about

$0

What the Estimate Considers

Your income, debts, down payment, mortgage payment at the qualifying rate, property tax, heating and condo fees.

What You Should Also Allow For

Closing costs, moving expenses, maintenance, utilities and the other costs of owning a home.

01

Your Finances

Annual Income

Enter your gross annual household income before taxes. If you are buying with a co-borrower, include the income that may be considered by your lender. Lenders may ask for documentation such as employment income, tax information and other sources of qualifying income.

Down Payment

Your down payment is the amount you are putting toward the purchase price rather than borrowing through your mortgage. The minimum is 5% of the first $500,000 and 10% of the portion above that, up to $1.5 million. At $1.5 million or more, it's 20%. If you put less than 20% down, mortgage loan insurance will typically be required. A larger down payment generally means a smaller mortgage and lower borrowing costs.

Other Monthly Debts

Include your regular monthly debt obligations, such as car loans, credit cards, lines of credit, student loans, personal loans and support payments. Lenders consider your overall debt load when determining how much mortgage debt you can reasonably qualify for.

02

Your Mortgage

Interest Rate

The interest rate affects both your mortgage payment and the total interest you will pay over time. The rate you enter is an estimate and may not be the rate you ultimately receive. Your actual rate will depend on factors such as your financial circumstances, credit history, mortgage type, down payment and the lender you choose.

Amortization Period

The amortization period is the total length of time it would take to pay off the mortgage based on the payment schedule and interest rate. A longer amortization can reduce the required payment, but generally increases the total interest paid over the life of the mortgage. With less than 20% down, the maximum is generally 25 years, or 30 years for first-time buyers and buyers of newly built homes.

Mortgage Term

The mortgage term is the period covered by your current mortgage contract. Common terms in Canada include one to five years, although other terms are available. The term is different from the amortization period, which is the length of time used to repay the mortgage in full.

03

Your Ownership Costs

Property Taxes

Property taxes are an ongoing cost of owning a home and should be included when considering affordability. The actual amount varies according to the property and municipality.

Heating

Lenders typically include heating when they calculate your housing costs. The amount varies with the home.

Home Insurance

Home insurance protects your property against covered risks and is an important ongoing cost of home ownership. Your lender may require proof of insurance before completing the mortgage. The cost varies depending on the property, location, coverage and other factors.

Condo Fees

If you are buying a condominium or another property with common expenses, include the applicable condo fees. These fees help cover the operation and maintenance of the common elements of the property. Lenders commonly count half of condo fees in their housing cost calculations, and this estimate does the same.

04

How Lenders Decide

Mortgage Qualification

Mortgage qualification is based on more than the purchase price. Lenders consider your income, debts, housing costs, credit history, down payment and other financial information.

The Stress Test

Federally regulated lenders generally require you to qualify at a rate higher than your actual mortgage rate: the greater of 5.25% or your contract rate plus 2%. This calculator uses that qualifying rate for your estimate and your actual rate for your monthly payment.

Gross Debt Service (GDS) & Total Debt Service (TDS)

Canadian lenders commonly use two measures when assessing mortgage affordability. GDS looks at housing-related costs as a percentage of gross income, while TDS also includes your other debt payments. As a general guideline, the Financial Consumer Agency of Canada uses 39% for GDS and 44% for TDS, although lenders may apply different criteria depending on the borrower and circumstances.

Use the Home's Actual Tax Bill

Hamilton property taxes are based on the property's assessed value and the applicable tax rates, which vary by location and property characteristics. The tax bill for the specific home you're considering is more useful than a generic estimate.

No Municipal Land Transfer Tax

For a Hamilton purchase, the Ontario provincial land transfer tax applies. Hamilton does not have the additional municipal land transfer tax that applies in Toronto.