This calculator helps you determine whether or not you can qualify for a home mortgage based on income and expenses.
Mortgage stress test
To qualify for a mortgage loan at a bank, you will need to pass a “stress test”. You will need to prove you can afford payments at a qualifying interest rate which is typically higher than the actual rate in your mortgage contract.
You need to pass this stress test even if you don’t need mortgage loan insurance.
Credit unions and other lenders that are not federally regulated do not need to use this mortgage stress test.
Banks must use the higher interest rate of either:
- 5.25%
- the interest rate you negotiate with your lender plus 2%
Enter the highest of the two rates above in the field Annual interest rate to determine if you can pass the stress test.
If you already have a mortgage, you’ll need to pass this stress test if you:
- refinance your home
- switch to a new lender, or
- take out a home equity line of credit
Property Information
$
This is the amount you expect to borrow from your financial institution. It may include the purchase price of your home plus the mortgage loan insurance.
Please specify how much you would like to consider as down payment. Please note that it is assumed the down payment is not borrowed. The minimum down payment is 5% for the first $500,000, 10% for the portion of the house price above $500,000 up to 1 million dollars and 20% for any house price over 1 million dollars. This tool does not include mortgage loan insurance when you have a down payment of 20% or more or when the property value is $1 million or more. Please note that in some situations, you may be required to get mortgage loan insurance, even if you have a down payment of 20% or more. For example, if you’re self-employed or have a poor credit history.
%
Annual interest rate for this mortgage.
The number of years and months over which you will repay this loan. The most common amortization period is 25 years. Not to be confused with the term of your loan, which is the duration of the loan agreement you signed with your financial institution and that has to be renewed regularly. Terms are generally for 1 to 10 years.
By choosing an accelerated payment frequency, you can reduce your amortization period and save thousands of dollars in interest in the long run. For example, the accelerated bi-weekly payment allows you to pay half of your monthly payment every two weeks. You will therefore make 26 payments a year, the equivalent of one extra monthly payment a year.
The number of term years.
Your Income and Anticipated Expenses
$
per
Please specify your yearly or monthly gross income. This value should be the total of the household income if you are buying the property with a partner. If you have sources of income other than a salary, ask your lender if they will include these sources for mortgage qualification. For example, self-employment income, commissions, bonuses, tips, investments, rental income, spousal and child support payments, disability insurance payments, etc.
$
per
Please enter an estimated value of heating cost for the property you intend to buy. Heating costs usually represent 1% of the value of the home.
$
per
Please enter an estimated value of taxes you would pay for the property you intend to buy.
$
per
Please enter the total monthly or yearly value of credit card or line of credit payments. This value should be the total of your payments as well as your partner payments if you are buying the property with a partner.
$
per
Please enter your monthly or yearly value of car payments. This value should be the total of your payments as well as your partner payments if you are buying the property with a partner.
$
per
Please enter your monthly or yearly value of other payments. This value should be the total of your payments as well as your partner payments if you are buying the property with a partner.
FCAC uses a Gross Debt Service (GDS) ratio of 32% and a Total Debt Service (TDS) ratio of 40% in this tool as a guideline. You may still qualify for a mortgage even if your GDS and TDS ratios are slightly higher. However, higher GDS and TDS ratios mean that you are increasing the risk of taking on more debt than you can afford.
You will likely be approved for a mortgage amount of $200,000.00 since your GDS ratio (30.84%) does not exceed 32.00% and your TDS ratio (39.84%) does not exceed 40.00%.
Request Amount This is the actual mortgage amount you are requesting - calculated by subtracting down payment (if any) from the value of the property you specified. | $200,000.00 ($250,000.00 - $50,000.00) |
Mortgage Loan Insurance Premium The minimum down payment required is 5% of the estimated value of the property; therefore, if no down payment specified it is assumed to be 5% of the estimated value of the property. NOTE: If your down payment exceeds 20%, the lender may still require you to purchase this insurance. In this case, the premium will be as follows: | $0.00 ($200,000.00 * 0.00%) |
Total Mortgage Amount Required This is the total mortgage amount. | $200,000.00 |
Read on below about GDS (Gross Debt Service) & TDS (Total Debt Service) ratio calculations to find out how your qualification for this mortgage was determined.
Mortgage Payment This is the amount of mortgage you would pay per period. | $1,191.84/month |
Heating Cost Calculated heating cost per month. | + $150.00/month |
Property Taxes Calculated property taxes per month. | + $200.00/month |
GDS Ratio Cost Calculated GDS Ratio Cost per month: GDS Ratio Cost per month = Mortgage Payment per month + Heating Cost per month + Property Taxes per month. | = $1,541.84/month |
Gross Income Calculated Gross Income per month. | ÷ $5,000.00/month |
GDS Ratio This is the calculated GDS Ratio based on the values you specified: GDS Ratio Cost per month ÷ Gross Income per month. | = 30.84% |
GDS Ratio Cost Calculated GDS Ratio Cost per month: GDS Ratio Cost per month = Mortgage Payment per month + Heating Cost per month + Property Taxes per month. | $1,541.84/month |
Credit Card / Line of Credit Payments Calculated credit card/line of credit payments per month. | + $100.00/month |
Car Payments Calculated car related payments per month. | + $350.00/month |
Other Debt Payments Calculated any other debt related payments per month. | + $0.00/month |
TDS Ratio Cost Calculated TDS Ratio Cost per month: TDS Ratio Cost per month = GDS Ratio Cost per month + Credit Card/line of credit payments + Car payments per month + Other debt payments per month. | = $1,991.84/month |
Gross Income Calculated Gross Income per month. | ÷ $5,000.00/month |
TDS Ratio This is the calculated TDS Ratio based on the values you specified: TDS Ratio Cost per month ÷ Gross Income per month. | = 39.84% |
Based on your GDS and TDS ratios, you could qualify for a mortgage with a maximum amount of $201,369.98, or a home with a maximum cost of $251,712.48 - assuming that your down payment would be the same percentage as what you entered in the calculator (20.00%).
Moreover, based on values you entered a summary report can be produced. The report includes all your input values, the qualification results, payment schedule as well as a list of other things to consider before applying for a mortgage. You may print the report and bring it with you when you visit the mortgage lender.
Rate This Tool
We want to hear from you! Please tell us what you think of this tool and how we can make it better.
We offer this mortgage calculator as a self-help tool for your use. This tool does not replace professional financial advice. We cannot guarantee that this calculator will apply or be accurate in your situation. For example, your mortgage lender may make its calculations in a different way. All calculations are examples only.