Mortgage Qualifier

The first step in buying a house is determining your budget. This calculator steps you through the process of finding out how much you can borrow. Fill in the entry fields and click on the payment schedule button to see a complete amortization schedule of your mortgage payments.

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Definitions

Annual income
Your gross annual income. For married couples this is your total combined gross annual income. Please note that if you enter a purchase price or total monthly payment the calculator will determine the gross annual income required to qualify for the purchase. This calculated amount may be higher or lower than your actual income.

Purchase price
The price of the home you wish to purchase. This is the actual price you pay, not including any closing costs. If you enter an annual income or a total monthly payment, the purchase price will be calculated based on these amounts.

Total monthly payment
Total monthly payment that you can qualify for. This is the total of principal, interest, taxes and heat paid each month. If you enter a purchase price or annual income, the total monthly payment will be calculated based on these amounts.

Cash on hand
Cash you have for the down payment and all closing costs.

Interest rate
The current interest rate you can receive on your mortgage.

Amortization in years
The number of years over which you will repay this mortgage.

Annual property taxes
The annual property tax paid on the home you are purchasing.

Monthly car payment(s)
Total monthly payment for your car loan(s).

Credit card payments
Total monthly minimum payments for your credit cards.

Other loan payments
Any other installment loan payments, such as student loans or unsecured loans.

Condo Fee
Monthly fee charged for your condominium that you expect to incur with the ownership of this home. Please note that condominiums are referred to as "strata" in the Province of British Columbia. We add 50% of your condominium fee to your Gross Debt Service (GDS) when calculating the maximum mortgage that you can qualify for.

Total closing costs
Total up front costs to close your loan. This is the total of your mortgage insurance premium, transfer tax, GST and other closing costs

Other closing costs
Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other misc. fees paid.

GST
This calculator calculates GST at 7% of a new home's purchase price minus a GST rebate. GST rebates are calculated as follows. For homes under $350,000, the rebate amounts to 36% of GST, up to a maximum rebate of $8,750. For homes between $350,000 and $450,000, the maximum rebate of $8750 declines to zero on a proportional basis. All homes selling for more than $450,000 receive no GST rebate.

Mortgage Loan Insurance Premium (non-refundable)
Mortgage insurance makes it possible for homebuyers to purchase a home using a lower down payment. The Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages without mortgage loan insurance for amounts that exceed 75% of the value of the home or purchases with less than 25% down payment. The Canadian Mortgage and Housing Corporation (CMHC) and Genworth Financial both offer Mortgage Loan insurance.

CMHC and Genworth Financial's current Mortgage Loan insurance Premium Rates*:
Loan Size
(% of property value)
Rate (as a % of loan)
Up to and including 65% (over 35% down payment)
0.5%
Up to and including 75% (25% to 34.99% down payment)
0.65%
Up to and including 80% (20% to 24.99% down payment)
1.00%
Up to and including 85% (15% to 19.99% down payment)
1.75%
Up to and including 90% (10% to 14.99% down payment)
2.00%
Up to and including 95% (5% to 9.99% down payment)
2.75%
Up to and including 95% Flex Down or Cash Back Equity Owner-Occupancy Program** (5% to 9.99% down payment)
2.90%
Up to and including 100% (0% to 4.99% down payment)
3.10%

*An additional 0.2% is added to all mortgages with amortizations of 26 to 30 years. An additional .4% is added to all mortgages with amortizations of 31 to 35 years. An additional .6% is added to all mortgages with amortizations of 36 years or more.

This calculator assumes that financial institutions will not charge any Mortgage Loan insurance Premium if you have more than a 25% downpayment. This calculator assumes that your mortgage insurance premium can be financed by your mortgage, which can greatly reduce the amount of upfront money that is required to purchase a home.

**Not all Financial Institutions offer CMHC's Flex Down and Genworth Financial's Cashback Equity Owner-Occupancy Program. Below is a brief summary of these two programs:

    CMHC's Flex Down
    Own your own home sooner by using a wider range of sources for your down payment. If you have a proven track record of meeting your debt requirements and sufficient income to support mortgage loan payments, your lender may be able to provide you with CMHC's Flex Down product. Sources for your down payment can include: borrowed funds, gifts and lender cash back incentives. For more information please see: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

    Genworth Financial's Cashback Equity Owner-Occupancy Program
    Some home buyers have an excellent credit history but have not yet saved the required down payment. Others have used their savings to build assets in different ways. Genworth Financial offers mortgage default insurance to both these groups. For more information please see: http://www.genworth.ca/mi/eng/industry_professionals/premiums.asp

    Acceptable loan purpose:

    • Property purchase
    • Purchase Plus and Insured Progress Advance
    • Available for extended amortizations up to 35 years (refer to 30/35 Year Product Overview for premium schedules)

    Ineligible loan purpose:

    • Business for Self (Alt A)
    • CreditAssist
    • CreditAssist for Self-Employed
    • Family Plan
    • First Mortgage Owner Occupied 3 and 4 units
    • HELOC
    • New To Canada
    • Secondary homes
    • Vacation Homes
    • Homebuyer 100

    Eligible properties

    • Maximum two units, one of which must be occupied as the principal residence
    • New construction or existing properties
    • Loan-to-value ratio limits: 'Loan-to-value' (LTV) is the relationship between the principal balance of a mortgage and the property value. For example, if you have a house valued at $100,000 with a $90,000 loan, you have a 90% LTV ($90,000 divided by $100,000 = 90%). For one and two units - 95% LTV

    Eligible equity sources

    • Lender cashback incentives
    • Equity borrowed from any source that is arm's length to the purchase or sale transaction, including personal loans, lines of credit or credit cards. Loan repayments must be included in the TDS calculation.
    • Gifts or grants from any party that is arm's length to the property purchase transaction
    • Rent to own payments that exceed a reasonable current market rent
    • Down payments may not be paid out of or included in the insured mortgage, including any recovery of lender cashback incentives.

    Ineligible equity sources
    Some equity sources are not eligible. These include sources that are not arm's length or that are tied to the purchase or sale of the property, either directly or indirectly. For example:

    • Builder incentives or loans
    • Realtor/ mortgage broker incentives or loans to the borrower that impact the property selling price
    • Loans/ gifts from the seller of the property (the vendor)
    • Third parties that receive payment from the vendor or the builder

GDSR: Gross Debt Service Ratio
Compares the total cost of your monthly mortgage payment, taxes and heating to your gross monthly (pre-tax) income from all sources. The general rule is that these monthly payments should not exceed 32% of your gross income.

TDSR: Total Debt Service Ratio
Examines the relationship between all monthly debts (i.e. mortgage payments, property taxes, cars, credit cards, other loans and obligations, etc.) and your gross monthly income. The general rule is that these total monthly payments should not exceed 40% of your income.

Qualify amount
Shown as "Total monthly payment." This is the total amount you qualify for per month. This amount is the total of "Principal, Interest, Tax and Heat" for your home.