A realistic maximum based on how Canadian lenders actually qualify you — the GDS and TDS ratios, plus the mortgage stress test. It's an estimate to guide your search, not a pre-approval.
Estimate only — not a pre-approval, mortgage commitment, or financial advice. Lenders weigh credit, employment, and other factors, and rules change. Confirm what you qualify for with a licensed mortgage professional.
How lenders decide what you can afford
Two ratios and one rule do most of the work:
GDS (Gross Debt Service) — about 39%. Your housing costs (mortgage, property tax, heat, half of condo fees) shouldn't exceed ~39% of your gross income.
TDS (Total Debt Service) — about 44%. All your debt payments together shouldn't exceed ~44%.
The stress test. You're qualified at the higher of your rate + 2% or 5.25%, so you can weather a rate increase. You still pay your real rate — but you borrow as if it were higher.
Qualifying for a price isn't the same as a home being worth it. An older furnace, roof, or panel can cost five figures after closing — money the bank doesn't count. Casaroo flags those before you offer.
Common questions
Why is my number lower than I expected?
The stress test is usually the reason — you qualify at a rate roughly 2% above the one you'll pay. It deliberately leaves room for rates to rise.
Does a bigger down payment help?
Yes, two ways: it adds directly to the price you can buy, and a down payment of 20%+ avoids CMHC insurance. Under 20%, insurance is required (on homes $1M or less).
Is this a pre-approval?
No. It's an educational estimate to guide your search. A lender's pre-approval considers your credit, employment history, and full application.
Know your budget. Now spend it well.
Casaroo reads any listing's bones and appearance and flags the costly surprises — so the home you can afford is also one worth buying.