There is a fast answer to this question and a correct one. The fast answer is a multiple of your income, usually four or five times, and it is wrong often enough to be worth ignoring. The correct answer comes out of two ratios and a stress test, and once you have seen how they work you can compute your own number in about five minutes.
Everything below is worked arithmetic. The assumptions are stated so you can change them, and the method is shown so you can redo it at your own numbers rather than trusting ours.
The two ratios
Lenders measure affordability with two debt service ratios, both published by the Financial Consumer Agency of Canada.
Gross Debt Service, capped at 39 per cent. Your total monthly housing costs should not exceed 39 per cent of gross household income. Housing costs means your mortgage payment, your property taxes, your heating, and half of your condo fees if you have them.
Total Debt Service, capped at 44 per cent. Your total debt load should not exceed 44 per cent of gross income. That is everything in GDS plus credit cards, car loans, lines of credit, student loans, and child or spousal support.
Gross means before tax. This is why a maximum that looks comfortable on paper can feel tight in practice: the ratios are measured against income you never actually receive.
Then the stress test cuts it
Your ratios are not tested at the rate you are offered. Federally regulated lenders must qualify you at the greater of your contract rate plus two per cent, or 5.25 per cent, which OSFI calls the minimum qualifying rate.
Here is what that costs, and it is the number nobody quantifies. Take a household earning $110,000 with no other debt, buying with a 25-year amortization, paying $300 a month in property tax and $125 in heating.
| Qualifying at | Maximum mortgage |
|---|---|
| 4.4% contract rate | $574,900 |
| 6.4% stress-tested rate | $474,600 |
| Difference | $100,300, about 17.5% |
Roughly a sixth of your buying power, removed before you start. This is the single biggest reason buyers are approved for less than they expected, and it is not a mistake or a penalty. It is a deliberate test of whether you could still pay if rates rose.
What that looks like by income
Same assumptions throughout: 25-year amortization, $300 a month in property tax, $125 in heating, no other debt, a 4.4 per cent contract rate so a 6.4 per cent qualifying rate.
| Gross household income | Monthly housing budget at 39% | Maximum mortgage |
|---|---|---|
| $90,000 | $2,925 | $376,600 |
| $110,000 | $3,575 | $474,600 |
| $130,000 | $4,225 | $572,500 |
| $150,000 | $4,875 | $670,400 |
These are mortgage amounts, not purchase prices. Add your down payment to get the price you can reach, and if you are still working out what that down payment needs to be, we have set out the minimum down payment rules for Alberta with the same worked arithmetic.
Against real Calgary prices
In August 2026 the Calgary Real Estate Board put the benchmark price of a typical home in the city at $569,800. By property type: detached $744,300, semi-detached $690,500, row $415,200, apartment $295,400.
Put those beside the table above and the picture gets concrete. A household on $110,000 with a $475,000 mortgage capacity and a $32,000 down payment is at roughly $507,000, which reaches a row home comfortably and a typical apartment easily, but is about $63,000 short of the city-wide benchmark and nowhere near a detached house.
Reaching the detached benchmark of $744,300 takes either an income closer to $150,000 or a substantially larger down payment. That is not a market commentary, it is just what the arithmetic says, and it is better to know it before you start looking than after you have fallen for a house.
The car payment finding
Every affordability guide tells you to pay off your car before applying. That advice is not wrong, but it is too blunt to be useful, and the real behaviour is more interesting.
Other debts only reduce your maximum once they push TDS below GDS as the binding constraint. Until that point, GDS is what limits you and additional debt costs you nothing at all.
| Other monthly debt | Maximum mortgage | Buying power lost |
|---|---|---|
| $0 | $474,600 | Nothing |
| $300 | $474,600 | Nothing |
| $500 | $468,300 | $6,300 |
| $700 | $438,200 | $36,400 |
At this income, with these assumptions, the threshold sits near $458 a month. A $300 car payment is genuinely free in mortgage terms. A $700 one costs about $36,400 of house. The gap between the two ratios is only five percentage points, and that gap is the entire budget you have for non-housing debt.
The practical version of the advice is this: find out whether your debts are already past the threshold. If they are not, clearing them will not raise your maximum and the money is better kept as down payment. If they are, clearing them buys you more house than saving the same amount would.
What condo fees do
Half your monthly condo fee counts as a housing cost inside GDS. Since GDS is usually the binding ratio, that half comes straight off your borrowing capacity.
| Monthly condo fee | Maximum mortgage | Buying power lost |
|---|---|---|
| $0 | $474,600 | Nothing |
| $400 | $444,400 | $30,200 |
| $600 | $429,400 | $45,200 |
| $800 | $414,300 | $60,300 |
A $600 monthly fee costs about $45,200 of purchasing power. When you are comparing two apartments where one has notably higher fees, the difference is not just a monthly expense. It changes what you are able to borrow, and therefore which units you can reach at all.
Worth saying clearly: high fees are not automatically bad. A well-funded reserve fund paid for by higher fees is cheaper than a special assessment caused by a starved one. That is a question the condo documents answer, and it is the reason reviewing them properly matters more than almost anything else in a condo purchase.
How to do this with your own numbers
Four steps.
- Multiply your gross household income by 0.39 and divide by twelve. That is your monthly housing budget.
- Subtract your expected property tax, heating, and half of any condo fee. What is left is what can go to a mortgage payment.
- Repeat with 0.44 instead of 0.39, and also subtract your other monthly debt payments. Take whichever of the two results is smaller.
- Convert that monthly payment into a mortgage amount at your qualifying rate, which is your offered rate plus two per cent, or 5.25 per cent, whichever is higher.
One technical note if you are checking our arithmetic. Canadian mortgages compound semi-annually rather than monthly, so converting a payment into a principal uses a slightly different monthly rate than a simple division would give. The formula used throughout this article reproduces the federal consumer agency's own published example to within one dollar, which is why we trust it for the figures they do not publish.
What this calculation does not know
The ratios count your mortgage, property taxes, heating and half your condo fees. That is all. They do not count childcare, vehicle running costs, groceries, savings, or the roof that will need replacing.
They also do not know that closing costs are due before you move in, that moving costs money, and that a house generates maintenance forever. A maximum is a regulatory ceiling on what a lender may extend to you, not a judgment about what your life can carry.
Finally, these numbers are illustrations rather than offers. Individual lenders apply their own overlays on top of the federal minimums, so two lenders looking at identical applications will not always produce identical maximums. The only figure that binds anyone is the one on a real pre-approval from a real lender, based on your actual documents.
Use this to know roughly where you stand and which questions to ask. Then go and get the real number, which means getting properly pre-approved rather than pre-qualified. Once you have it, the next decision is which kind of mortgage to take, and the amortization you choose there will move the numbers above again.