A lender doesn't look at your paycheque and pick a number. It runs two ratios at a rate you'll probably never pay, checks your cash against the minimum down payment rules, and approves you for whichever answer comes out lowest. The calculator above runs the same checks and tells you which one you're up against. That matters more than the headline number, because it decides what's actually worth doing next.
The two ratios every lender runs
Gross debt service (GDS) is your housing cost divided by your gross monthly income. Housing cost here means four things: the mortgage payment at the qualifying rate, property tax, heating, and half of any strata fee. The insured-mortgage limit is 39%, and CMHC, Sagen and Canada Guaranty all use it. Most banks apply the same limit to conventional mortgages too, although some credit unions and alternative lenders set their own.
Total debt service (TDS) takes the same housing cost and adds every other debt payment you have: car loans and leases, student loans, support payments, and a slice of your credit card and line of credit balances. The limit is 44%.
The calculator's default household earns $92,000 and $68,000, so $160,000 a year, or $13,333 a month. They have $110,000 saved, a $620 car payment and $4,500 on their cards, and they're looking at townhouses with a $400 strata fee.
At a $785,000 price, the lender counts a $4,594 mortgage payment at the qualifying rate, $216 of property tax, $100 of heat and $200 for half the strata fee. That's $5,110, or 38.3% of income, so GDS passes. Add the $620 car payment and $135 for the cards and TDS lands at 44.0%. That's the wall. At $786,000 they'd fail.
Notice what isn't in either ratio: food, childcare, gas, phones, insurance on your car, and anything you save. Two households with the same income and the same debts get the same approval whether they spend $400 or $2,000 a month on childcare. The lender is measuring what it can see on paper, not whether your life fits around the payment. Keep that in mind when you read the result.
The stress test, in dollars
Every mortgage from a federally regulated lender has to qualify at the higher of two rates: your contract rate plus two percentage points, or 5.25%. With insured 5-year fixed rates around 4.3% in late September 2026, the plus-two side wins for basically everyone, so the test rate is about 6.3%. The 5.25% floor would only take over if contract rates dropped below 3.25%, and nobody is offering that right now.
It's easy to treat this as an abstraction, so here it is for the default household. At $785,000 they'd actually pay $3,790 a month. The lender tests them at $4,594, a gap of $804 a month they will likely never see. Without the stress test they would qualify for about $921,000. With it, about $785,000. The test costs them roughly $136,600 of purchasing power, and the calculator shows that same comparison for your own numbers.
Where the rule stands: OSFI, the federal banking regulator, reviewed the stress test in January 2026 and left it unchanged. At the same time it kept its loan-to-income limits in place. Since 2025, each bank has had to cap the share of new uninsured mortgages that go above 4.5 times the borrower's income. That cap applies to the bank's whole portfolio, not to you personally, but it's worth knowing about. For a $160,000 household, 4.5 times income is $720,000. If you're asking for a lot more than that on a conventional mortgage, some banks will simply be less flexible about it.
A few more things that affect who gets tested and how:
- Insured mortgages go through the same test at every lender, because the insurers require it.
- BC credit unions are provincially regulated and aren't bound by OSFI's rule directly. Most apply a similar test, and a few have some room on uninsured files.
- At renewal, you don't get tested again if you stay with your lender or switch lenders without increasing the loan. The mortgage payment calculator covers renewal in more detail.
What counts as income
Lenders use gross income they can document, and they're conservative about anything that moves around.
Salary counts at face value once you're permanent and past probation. Many lenders will work with a new job in the same field, but a probation period still on the clock can hold things up.
Hourly work counts at guaranteed hours. Overtime, bonuses and commission are usually averaged over two years using your T4s or notices of assessment, so a great year that followed a weak one gets pulled down.
Self-employed income is normally the two-year average of line 15000 on your notices of assessment. That's the number after the write-offs that kept your tax bill low, which is exactly why so many business owners are surprised by their pre-approval. Some lenders will add back certain expenses, and there are business-for-self programs, usually at a higher rate. If you own a business, talk to a broker six months before you shop, not six days before.
Parental leave is usually handled with a letter from your employer confirming your return date and salary. Canada Child Benefit is counted by some lenders if your youngest child has enough years of eligibility left, and ignored by others. Rental income from properties you already own is counted either as a percentage of the gross rent or as net rent after expenses, depending on the lender.
New to Canada? There are dedicated programs for permanent residents and some work-permit holders, and they come with their own rules. Our newcomer buying guide walks through them.
How your debts get counted
This is where approvals quietly shrink.
Credit cards and unsecured lines of credit. Most lenders count 3% of the balance on your credit report as a monthly payment, even if you pay the card off in full every month. The default household's $4,500 becomes $135 a month in the TDS math. Timing matters here: the balance that counts is whatever shows on the bureau when the lender pulls it, so pay cards down before you apply, not the week after.
Car loans and leases count at the actual payment. A lease you're planning to end still counts until it's gone.
Student loans count at the payment. If you're in a repayment holiday, some lenders use a percentage of the balance instead.
Support payments count. Co-signed loans count too, even when someone else makes every payment. Parents who co-signed a child's car loan find this out at the worst possible moment.
A rough rule at today's qualifying rate: every $100 a month of debt payments knocks about $12,400 off your maximum price. That holds only while TDS is the ratio stopping you. Once housing costs reach 39% of income, paying off more debt adds nothing.
A $620 car payment supports about $94,000 of mortgage at the 6.34% test rate, so paying off the car looks like it should add something close to that. For the default household it adds $12,500. Getting rid of the car payment takes TDS from 44% down to about 40%, but GDS hits 39% after the first $100 or so, and from that point on housing costs are the limit. The levers panel above works this out for your numbers, so you can see whether a payoff actually helps before you spend the money.
Your cash sets its own ceiling
Income decides what you can carry. Cash decides what you're allowed to buy. The minimum down payment is 5% of the first $500,000 and 10% of the part between $500,000 and $1.5 million, and at $1.5 million or more it's 20% of the whole price. So whatever your income, your savings put a hard cap on the price.
| Cash for the down payment | Highest price the minimum down allows |
|---|---|
| $30,000 | $550,000 |
| $50,000 | $750,000 |
| $75,000 | $1,000,000 |
| $100,000 | $1,250,000 |
| $124,900 | $1,499,000 |
| $125,000 to $299,999 | Just under $1,500,000 |
| $300,000 or more | Five times your cash (20% down) |
"Cash" here means what's left after closing costs. Lenders generally want to see about 1.5% of the price set aside for closing on top of the down payment. BC's property transfer tax can be a lot more than that if you don't qualify for an exemption, so check with the transfer tax calculator and the closing cost calculator before you settle on a number.
The money can come from several places:
- Savings, including an FHSA: up to $8,000 a year and $40,000 in total, deductible going in and tax-free coming out for a first home.
- The RRSP Home Buyers' Plan: up to $60,000 per person, repaid over 15 years.
- A gift from immediate family, backed by a signed gift letter.
- Proceeds from selling another property.
Borrowed down payments are tightly restricted, and where they're allowed, the loan payment goes into your TDS.
Household income vs maximum price in 2026
To give you a sense of scale, here's what different household incomes qualify for with no other debts. The assumptions: a $400 strata fee, $100 of heat, property tax at 0.33% of the price, and a 4.34% contract rate tested at 6.34%.
| Household income | Max price, minimum down, 25 yrs | Down payment needed | Max price, minimum down, 30 yrs* | Max price, 20% down |
|---|---|---|---|---|
| $80,000 | $338,000 | $16,900 | $361,000 | $414,000 |
| $100,000 | $434,000 | $21,700 | $463,000 | $531,000 |
| $125,000 | $556,000 | $30,600 | $595,000 | $677,000 |
| $150,000 | $682,000 | $43,200 | $729,000 | $823,000 |
| $175,000 | $808,000 | $55,800 | $863,000 | $970,000 |
| $200,000 | $934,000 | $68,400 | $998,000 | $1,116,000 |
| $250,000 | $1,186,000 | $93,600 | $1,266,000 | $1,408,000 |
Look at the gap between the minimum-down and 20%-down columns. At $150,000 of income, 20% down lifts the maximum from $682,000 to $823,000. Part of that is simply a smaller loan, and part is no insurance premium being added to it. Getting there takes $165,000 of cash instead of $43,200, though, which is why most first-time buyers in the Lower Mainland end up on the insured side.
Property tax matters more than people expect. The 0.33% estimate is about right for most of Metro Vancouver's bigger cities in 2026 once the school and regional levies are included. Cities further out, where assessed values are lower, often charge a higher rate. If you're testing a specific listing, put in the tax from the listing instead of the estimate.
Suite income and Bill 44
Since Bill 44, municipalities across BC have had to allow a secondary suite or a laneway home on most single-family lots. For buyers, that makes a house with a legal suite one of the few real ways to stretch a qualification, because lenders can count part of the rent as income.
How much counts depends on who's insuring the mortgage and who's lending. For an owner-occupied two-unit home, CMHC will consider up to 100% of the suite's gross rent. In other cases it's up to 50%, and many lenders use 50% on conventional mortgages. Either way the lender will want to see the suite is self-contained and meets local rules. They'll also want either an existing lease or an appraiser's estimate of market rent. Short-term rental income generally doesn't count.
For the default household, a suite renting for $1,800 a month adds about $55,900 to the maximum price if the lender counts half of the rent. If it counts all of it, the gain is about $111,600. Houses with legal suites cost more than townhouses, so this isn't free money, but it can be the difference between a house being out of reach and being within reach.
If you're looking at a house with an existing suite, check the permit history on the listing and ask the city whether the suite is legal before you count on the rent. An appraiser who flags a non-conforming suite can take that income off the table after you've already removed subjects.
Which change moves your number most
For the default household, ranked from biggest effect to smallest:
| Change | Maximum price moves by |
|---|---|
| Buy a house with a legal suite renting for $1,800, half counted | +$55,900 |
| 30-year amortization (first-time buyers and new builds) | +$44,800 |
| Find a rate 0.25% lower | +$15,100 |
| Pay off the $620-a-month car loan | +$12,500 |
| Add $10,000 to the down payment | +$11,500 |
| Clear $4,500 of card balances out of savings | +$8,100 |
The card line is the one that surprises people. Clearing $4,500 of balances removes $135 a month from the ratios, but it also takes $4,500 out of the down payment, and on this file the smaller down payment eats about a third of the benefit. If the cards were being paid from income over the next couple of months instead, the gain would be about $12,500.
The 0.25% rate line is also bigger than it looks. A lower contract rate lowers the qualifying rate by the same amount, so shopping your rate raises your maximum and your monthly budget at the same time.
Your ranking will look different from this one. A household with heavy debts will see debt payoff at the top. A household with lots of income and little cash will see every income lever come back at zero, because cash is what's stopping them. That's the point of running it yourself.
Qualifying for it and living on it
At the maximum, 39% to 44% of your gross income is going to costs the lender counts. For a two-income BC household around $160,000, take-home pay is roughly three-quarters of gross, which is about $10,000 a month.
Now take the default household at $785,000. At the 4.34% they'd actually pay, the real monthly cost is about $4,500: the mortgage, property tax, heat and the full strata fee. Add the car and it's half of their net pay, before food, childcare, or saving anything at all. Some families live comfortably on that. Plenty don't.
The costs the ratios ignore are the ones that decide whether it works:
- Upkeep on a house: the roof, the hot water tank, the furnace.
- Special levies in a strata.
- Childcare.
- Insurance.
- The payment at renewal. If rates are two points higher in five years, the default household's payment goes up by roughly $700 a month.
One honest check: switch the calculator to "Test a specific home," put in the price you're thinking about, and add up the payment you'd actually make, the tax, heat and the full strata fee. Set that against your real take-home pay, not your gross, and decide whether the number that's left over is one you could live on for five years.
From pre-approval to completion
A pre-approval is a lender's opinion of you based on the documents you've sent so far, usually with a rate held for 90 to 120 days. It isn't a commitment to lend on any particular home. The real approval happens once you have an accepted offer. At that point the lender looks at the property through an appraisal and, for a condo or townhouse, the strata documents: the Form B, the depreciation report, the insurance certificate and the minutes. Buildings with big pending levies, very small units or unusual insurance deductibles can get declined even when the buyer is fine.
That's why BC offers usually carry a subject-to-financing clause, commonly for about a week. BC's three-business-day home buyer rescission period is a separate thing. It isn't a financing condition, and using it costs 0.25% of the price.
Between approval and completion, don't change jobs, don't buy a car, don't open new credit and don't co-sign anything. Lenders can and do re-check before they fund.
Presales need their own planning. You qualify when you sign the contract, but the mortgage is only approved when the building completes, sometimes years later, at whatever rates and rules apply then. Our presale guide covers how to plan for that gap.
Mistakes we see with affordability
Treating the maximum as the budget. The maximum is where the lender stops saying yes. Your budget should come from the "living on it" math above.
Forgetting the 3% card rule. A $10,000 balance you plan to clear next month still costs you about $300 a month in TDS on the day the lender pulls your credit.
Buying the new car before closing. A $700-a-month car payment added after pre-approval can knock $80,000 or more off what you qualify for, and lenders re-check.
Running only the income math. Plenty of buyers qualify on income for a price their cash can't reach. Check the down payment ceiling first.
Counting suite rent before checking the suite is legal. An unpermitted suite may contribute nothing to your qualification.
Using one tax estimate for every city. The same price carries different property tax in different municipalities. On a specific listing, use the actual figure.
Questions people ask us
What income do I need to buy a $1 million home in BC?
With the minimum $75,000 down, no other debts, no strata fee, $150 a month of heat, property tax at 0.33% and a 4.34% rate tested at 6.34%, a household needs about $208,500 of gross income on a 25-year amortization. With $200,000 down (20%) it drops to about $175,600. Car payments and card balances push the requirement up.
Is the stress test rate the rate I'll actually pay?
No. The qualifying rate is only used to check whether you could handle higher payments. You pay your contract rate. On a 4.34% mortgage you're tested at 6.34%, but your payments are calculated at 4.34%.
Does the stress test apply at BC credit unions?
Insured mortgages go through the same test everywhere because the mortgage insurers require it. BC credit unions are provincially regulated and aren't bound by OSFI's rule for uninsured mortgages. Most apply a similar test anyway, and a few have some flexibility.
Does my partner's income count if they're not on the mortgage?
No. Lenders count income from the people on the application. Adding a partner or family member as a co-borrower or guarantor brings their income in, but their debts come in too, and they become responsible for the loan.
How much do credit card balances hurt my approval?
Most lenders count 3% of the balance on your credit report as a monthly payment, even if you pay it off in full. At today's qualifying rate, each $100 a month of debt payments costs roughly $12,400 of maximum price while total debt service is your limiting ratio.
Can I use rent from a basement suite to qualify?
Yes, if the suite is self-contained and legal. For an owner-occupied two-unit home, CMHC will consider up to 100% of the suite's gross rent. Many lenders count 50% on conventional mortgages. Expect to provide a lease or an appraiser's rent estimate. Short-term rental income generally doesn't count.
What credit score do I need?
For an insured mortgage, at least one borrower needs a credit score of 600 or higher. The best rates usually go to scores in the high 600s and above, and a lower score can mean a higher rate or a smaller approval even when your ratios pass.
Does a 30-year amortization help me qualify?
Yes. For the calculator's default household it raises the maximum price by about $44,800. With less than 20% down, 30 years is available to first-time buyers and buyers of newly built homes, with a 0.20% surcharge on the insurance premium. With 20% or more down, most lenders offer it to anyone.
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Turn this number into a real pre-approval
Send us your numbers and Dan will put you in touch with a mortgage broker who fits your file, whether that's salaried, self-employed, a newcomer or suite income. He'll also send listings that fit the budget you settle on, not just the maximum. Your calculator inputs come along with the message.
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