To know how much you can borrow for a home in Canada, you need to consider several factors:

1. Income & Debt

• Gross Debt Service (GDS) Ratio: Your monthly housing costs (mortgage, property taxes, utilities) should be 32% or less of your gross income.

• Total Debt Service (TDS) Ratio: All your monthly debt payments (mortgage + other debts) should be 40% or less of your gross income.

2. Down Payment

• Minimum down payment:

  • 5% for homes up to $500,000

  • 10% for the portion of homes above $500,000 (up to $1 million)

  • 20% for homes over $1 million

The larger your down payment, the less you need to borrow.

3. Credit Score

• A good credit score (680 or higher) helps secure a better interest rate and higher borrowing capacity.

4. Stress Test

• You must pass a stress test where your mortgage must be affordable at a higher interest rate (either 5.25% or 2% above your actual mortgage rate).

5. Get Pre-Approved

• A pre-approval provides a more accurate estimate of how much you can borrow, based on your financial situation.

6. Rough Estimate

• As a rule of thumb, you can typically borrow 4.5 to 5 times your annual income.

For an accurate answer, use an online mortgage calculator or get pre-approved by a lender.