First — which path applies to you?
The real maximum price you qualify for — including the OSFI stress test.
Lenders quote pre-approval numbers that assume you’ll never see your other expenses. This calculator runs the stress-tested GDS and TDS ratios honestly.
Qualifying rate = greater of contract + 2% OR 5.25% benchmark. Required by all federally-regulated Canadian lenders.
Want this integrated with your closing-cost picture?
Book a 20-minute walkthrough. We’ll combine your mortgage qualifying number with land transfer tax, downpayment, and closing-cost projections so you walk into showings with a real budget.
Email me a personalized buying-budget scenario
Why your lender’s pre-approval is bigger than what you can actually buy
Bank pre-approvals are quoted at maximum theoretical capacity — the largest mortgage their algorithms can justify before your closing costs, lifestyle expenses, and reality enter the picture. A pre-approval letter for $1.2M typically assumes you have zero ongoing maintenance, average utilities, and no preference for actually enjoying your salary. The lender’s job is to maximize mortgage origination. Your job is to find the number that lets you keep living the life you want while owning the home. The honest qualifying number is usually 15-25% below the pre-approval letter — and the calculator above runs that math by including property tax, heating, condo fees, and existing debt service in the affordability equation, the way OSFI actually requires lenders to underwrite. The result is a maximum purchase price that survives contact with the rest of your budget.
How OSFI stress test changes your maximum (and why it protects you)
The OSFI stress test was introduced after the 2008-2017 mortgage debt expansion and tightened multiple times since. The current rule: federally-regulated lenders must qualify you at the greater of your contract rate plus 2% OR a 5.25% benchmark. So a 5.5% contract rate qualifies at 7.5%; a 3.0% promotional rate still qualifies at 5.25%. The practical effect: your maximum qualifying mortgage at a 5.5% contract rate, $150K income, $200K down, and a 25-year amortization is roughly 12-15% smaller than it would be without the stress test. That smaller number is the protection. If rates rise during your term (which they did 2022-2024, by 4 percentage points in 18 months), you’re already qualified at the higher rate — the payment shock doesn’t break your budget. Buyers who hate the stress test for the smaller qualifying number are usually people who eventually need it most. Toggle it off in the calculator above to see the pre-stress-test number; toggle it on to see what most Canadian lenders will actually approve.
The GDS/TDS gap: what banks tell you vs what you should target
Gross Debt Service (GDS) ratio is your housing cost — mortgage payment, property tax, heating, half of condo fees — divided by gross monthly income. Total Debt Service (TDS) ratio adds car loans, credit card minimums, line-of-credit payments, and student loans. Lender ceilings: 39% GDS, 44% TDS. Hit either ceiling and your maximum is limited. Most buyers max out at the GDS ceiling on a 25-year mortgage, which is the right ceiling to track for affordability. But “qualify at 39% GDS” is not the same as “comfortable at 39% GDS.” Financial planners recommend targeting 28-32% GDS for sustainable cash flow, leaving room for retirement savings, vacation, kids’ costs, and the unexpected. The 7-11 percentage-point gap between “lender max” and “planner-recommended” is the difference between owning the home and the home owning you. Run the calculator at 28% as well as the default 39% — that’s typically a $150K-$250K price difference at GTA price points, and the cheaper home is usually the right one. Book a 20-min buying-budget walkthrough if you want both numbers modelled against your specific target neighborhoods.
More tools: land transfer tax calculator · seller net sheet calculator · pre-listing prep checklist