How Much Can I Afford?

Two ratios do almost all the work. GDS (Gross Debt Service) caps your housing costs — mortgage payment, property tax, heat, and half of any condo fee — at roughly 39% of gross income. TDS (Total Debt Service) caps housing plus every other debt payment at about 44%.

Then the stress test applies. You do not qualify at the rate you will pay; you qualify at the greater of your contract rate plus 2%, or 5.25%. At today's five-year fixed pricing that means being assessed at roughly 6.19% while actually paying about 4.19%.

That single rule is why a household earning $120,000 gets a smaller number than they expect — and why paying off a car loan can add more borrowing power than a raise.

Most quick online calculators — including some run by lenders — ask for income and down payment, then stop. They quietly assume you have no other debts, and they often leave out property tax and heat, both of which lenders must include in GDS.

The result is a number that feels great and collapses at application. This calculator includes your debts and uses the stress-tested qualifying rate, so the figure it produces is closer to what a lender will actually say.

Two things it still cannot know: how your credit history reads, and whether the specific property qualifies. A rural acreage, a small condo, or a home with an income suite can all change a lender's answer regardless of your income.

Clear consumer debt. This is the biggest lever by a distance. Because TDS counts monthly obligations, eliminating a $500 car payment can free up roughly $100,000 of borrowing room — far more than most people gain from a raise.

Add down payment. Beyond reducing the loan, crossing 20% removes default insurance entirely.

Extend the amortization. Moving from 25 to 30 years lowers the qualifying payment and raises your approval. You pay more interest over the life of the loan — an honest trade, not a free win.

Add a qualified co-signer. Their income joins the calculation, and so does their debt.

Want the reverse view — the income needed for a specific mortgage size? The full table runs from $200K to $900K.