House Down Payment

Determine What You Can Afford

When hunting for a new home, knowing up front what you can afford will help you save time and quite possibly disappointment later on. Buying a home is a major purchase, therefore, you’ll want to make sure that any home you buy meets your housing needs and fulfills as many of your housing wants as possible, based upon your budget.

The maximum home price that you can afford depends on a number of factors but the most important are your gross household income, your down payment and the mortgage interest rate.

Aim at consuming no more than about 32% of your gross monthly income for your monthly housing payments.

Housing payments include monthly mortgage principal and interest, property taxes, heat expenses, and if applicable, 50% of condominium fees. This amount is referred as Gross Debt Service (GDS) ratio.

You may have other monthly financial obligations such as car and credit card payments, property taxes, other loans, etc. The relationship between these all monthly debts plus your mortgage, and your gross monthly income is called Total Debt Service Ratio (TDS). The general rule is that these total monthly payments should not exceed 40% of your income.

Find out more about debt service ratios.

You can also use calculators to find out how much you can afford to pay. Calculators provided on this site are helpful tools meant only as a help to provide general guideline for the user and should not be relied upon in connection with any particular transaction or situation.

If you want review your general financial state, use net worth calculation as basic method of determining your general financial situation.

Use monthly expense estimate to find out impacts on the maximum affordability.

By knowing exactly what you can afford, you can make your home purchase with confidence.

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Since mortgage insurance is very often confused with other types of insurance associated with home ownership, on this page we will explain the difference, help you understand it better, and learn more about different options available to you.


Arranging to pay for that property you plan to buy is one of the most important financial decisions you will ever make. Regardless of how certain you are that you will get mortgage, it is always good idea to get pre-approved from the mortgage lender of your choice. Read more...

Know your credit file and score. Your credit score has an enormous impact on your financial picture.
Your credit, income and down payment are 3 main factors that will be considered before you get approved for a mortgage.
One way to help boost your down payment is to borrow money from your RRSP.
Don’t make any big purchases before getting approved for a mortgage.

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