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What You Can Afford

Lenders test you at a higher rate than you will pay: yours plus 2 points, or 5.25% if that is higher.

Amortization period
Maximum purchase price

$792,748

Housing costs are what caps the price: the lender's share-of-income rule on housing costs is reached first.

Maximum mortgage you qualify for
$642,748
Mortgage default insurance premium, added to the loan (2.80%)
$17,997
What you actually borrow, and pay interest on
$660,745
Housing costs, share of income
39.0%
All debt, share of income
43.0%
Qualifying rate (the stress-test rate)
6.31%
Monthly principal and interest at the qualifying rate (the pre-approval test)
$4,350
Monthly principal and interest at the contract rate (what you actually pay)
$3,588
Closing-cost estimate: transfer tax, legal and adjustments
$16,855
Down payment as % of max price
18.9%
Notes: what less than 20% down means here

Down payment is below 20%, CMHC default-insured mortgage applies (premium of 2.8% to 4.0% of the loan, added to the mortgage). See the Codex entry.

Notes: the first-time buyer exemption

Below the first-time-buyer phase-out band ($860,000). If this is your first home, tick the box above and the closing-cost estimate will apply the BC First-Time Home Buyer Property Transfer Tax exemption. See the Codex entry.

Method: show the math8 steps
StepAmount
Qualifying rate = max(4.31% + 2.0pp, 5.25%) = 6.31% Source—
Monthly gross income (annual / 12)$12,500.00
Other housing (prop tax/12 + heating + 50% strata)$525.00
Maximum principal + interest under the housing-cost ratio, 39% (39.0% × monthly income − other housing)$4,350.00
Maximum principal + interest under the total-debt ratio, 44% (44.0% × monthly income − other housing − monthly debts)$4,475.00
Whichever binds first: housing costs$4,350.00
Max mortgage your income qualifies for, at the qualifying rate (6.31%, 25-year amortization)$660,744.71
Max purchase price = max mortgage + down payment$792,747.77
Total$792,747.77

Computed from the BC Real Estate Codex · CC BY 4.0

Notes: estimate only, and what this does not consider

Estimate only. Confirm with a licensed professional before relying on this number.

Final pre-approval is set by your lender against your credit report, employment letter, downpayment-source documentation, and the appraisal of the actual property. This calculator mirrors the federally-regulated lender convention (OSFI B-20 + standard GDS/TDS limits); credit unions, private lenders, and second-mortgage products may use different rules. This is not a mortgage quote or pre-approval, talk to a licensed mortgage broker for an actual approval.

This is not a mortgage quote or pre-approval. Bronson Job is not a licensed mortgage broker; talk to a licensed broker for an actual approval.

How we verify

Try a typical scenario

Where this fits in your buying journey

  1. 1AffordabilityWhat you can buy
  2. 2PTTTransfer tax
  3. 3Cash-to-CloseClosing day cash
  4. 4MortgageMonthly payment

How the qualifying rate works

At a 5.5% contract rate, the qualifying rate is 7.5%, contract rate plus 2 percentage points. On an $800,000 mortgage over 25 years, monthly principal and interest at the contract rate is about $4,883; at the qualifying rate it is about $5,852, a $969-a-month difference. Pre-approval is sized so the qualifying-rate payment fits inside the lender debt-service limits (housing costs no more than 39% of income, total debt no more than 44%), not the contract-rate payment.

On the default inputs (income $150,000, $500 a month in other debts, $150,000 down) at a 5.5% contract rate, the qualifying rate caps the mortgage at about $594,600 and the price at about $744,600. The qualifying-rate figure is what the lender will actually advance. The contract-rate payment is what the buyer pays month to month.

Common questions about home affordability in BC

  • What is the federal mortgage stress test?
    A federal rule (OSFI Guideline B-20) requiring lenders to qualify mortgage applicants at a rate higher than the contract rate. The qualifying rate is the greater of the contract rate + 2 percentage points or 5.25%, whichever is higher. The lender sizes your pre-approval against that higher rate, even though your actual monthly payment uses the contract rate.
  • What are GDS and TDS ratios?
    Gross Debt Service (GDS) is the share of your gross monthly income that housing costs can take, principal, interest, property tax, heat, and half of strata fees. The CMHC convention is GDS ≤ 39%. Total Debt Service (TDS) adds your other monthly debt obligations (car loans, student loans, credit-card minimums) and is capped at 44%. Whichever ratio is tighter at the qualifying rate is the binding constraint on your maximum mortgage.
  • Can two incomes be combined?
    Yes: lenders use combined household income for joint applications. Enter the total gross household income above. The same applies to monthly debts: enter combined household debt obligations. The GDS and TDS limits apply to the combined household figures.
  • What happens if my down payment is below 20%?
    Less than 20% down on a purchase price below $1,500,000 requires default insurance: a premium of 2.8% to 4.0% of the loan, depending on the loan-to-value band, plus 0.20% if the amortization is longer than 25 years. The premium is added to your mortgage. CMHC lists Quebec, Ontario and Saskatchewan as the provinces that charge sales tax on the premium; BC is not among them. At $1,500,000 or more, insurance is unavailable and you need at least 20% down. Source: CMHC, “CMHC mortgage loan insurance cost”.
  • Does this give me a pre-approval?
    No. This calculator estimates the maximum mortgage and purchase price you qualify for under the OSFI B-20 stress test using standard CMHC GDS/TDS limits. A real pre-approval verifies your income, credit, down-payment source, and applies the specific lender's underwriting rules (which may differ slightly, credit unions and private lenders use different rates and ratios). Talk to a licensed mortgage broker for an actual approval.
  • What does the closing-cost estimate include?
    It covers the largest line items, Property Transfer Tax net of the first-time-buyer exemption, plus typical legal/notary fees, title insurance, and prorated adjustments. It deliberately leaves out a couple of deal-specific costs, most notably the home inspection, which is paid before completion, and any deal-specific adjustments. For the full line-by-line number on a specific purchase, use the cash-to-close calculator.
Sources(7)

Also drawn from: Office of the Superintendent of Financial Institutions, Canada Mortgage and Housing Corporation, BC.gov.ca.

Spot an issue? Report an inaccuracy. How we verify.

Bronson Job PREC, REALTOR® at Momentum Realty Inc.. GVR Member #6015742 · FVREB Member #FJOBBR

Last reviewed by Bronson Job PREC, REALTOR®. Licence CC BY 4.0. How we verify.