Your income
What you earn: the foundation of what lenders will approve.
Counted as income: $1,050/mo
Understand the numbers
What is the TDS ratio?
Total Debt Service ratio: the share of your gross monthly income that can go to all housing costs and debt payments combined, including both mortgages, property taxes, heating, condo fees, car loans, and other debts. Canadian lenders cap it around 44%.
What is the stress test?
Federally regulated lenders must qualify you at the higher of your contract rate + 2% or 5.25%, even though you'll pay the contract rate. It reduces the mortgage you qualify for, and it applies to second homes and investment properties too.
Why doesn't all my rental income count?
Lenders discount rental income, typically counting 50 to 80%, to allow for vacancies, repairs, and management costs. The exact treatment varies by lender; this calculator uses the common approach of adding it to your income.
How much down payment do I need?
A rental or investment property requires at least 20% down. A secondary home you live in yourself can be insured with 5% down on the first $500,000 and 10% on the rest, up to a $1.5M purchase price. Above that, 20% applies. With less than 20% down, a mortgage default insurance premium of roughly 2.8 to 4% of the loan is added to your mortgage, and the calculator includes it.