How Much Mortgage Can I Afford in Ontario? 

Before we talk numbers, let’s unpack what mortgage affordability really means in Ontario:

• It’s not just how big a loan you can get — it’s how big a loan you can comfortably manage in the long term.

• Lenders consider your income, existing debt, down payment, interest rate and amortization (loan term). For example, federally regulated lenders often require you to qualify at a higher “stress-test” rate. Canada.ca

• Ontario buyers must budget for more than just mortgage payments: property taxes, heating, utilities, condo/maintenance fees (if applicable), and closing costs (lawyer fees, land transfer tax).

• Two key ratios used by many Canadian lenders are:

  • Gross Debt Service (GDS): percentage of your gross income that goes toward housing costs (mortgage + taxes + heating + condo fees) 

  • Total Debt Service (TDS): percentage of your gross income that covers housing costs and all other debt payments (car loans, credit cards, etc) 

Bottom line: Knowing your comfort zone ahead of time helps you avoid over-reaching and buy smarter.

Step A: Determine your gross household income

Include your salary, bonuses, any other regular income, and if applicable your partner’s income. The more accurate you are, the better your affordability estimate.

Step B: List your monthly debt payments

Include car payments, credit-card payments, lines of credit, student loans, etc. These feed into your TDS.

Step C: Identify expected home-ownership costs in Ontario

• Mortgage payment (principal + interest)

• Property taxes (varies by city/municipality)

• Utilities/heating

• Condo maintenance fees (if applicable)

• Home insurance

Step D: Use simplified ratio guidelines

• Many lenders use a GDS threshold around 30–32% of gross income for housing costs. 

• For TDS, you might see up to 40-44% of gross income for housing + other debt. 
  If your numbers exceed these ranges, you may still qualify — but you’re entering higher-risk territory.

Step E: Plug into a calculator

Use an online tool (e.g., TD, or CMHC) to get a tailored estimate. For example:

• TD’s tool guides you through down payment, income, debt and monthly expenses. 

• Ratehub breaks down how down payment, amortization, debt and interest rate change affordability. 

Step F: Set a comfortable budget — not just a “max” budget

Just because a lender might approve you for, say, a $700,000 home doesn’t mean you should buy one. Ask yourself: Will I still have money left over for life & emergencies? Am I comfortable if rates rise or my income dips?

Here are items to watch that significantly impact affordability:

• Down payment size: Larger down payment = smaller mortgage = lower monthly payment. Also, if you put less than 20% down, you’ll need mortgage default insurance (CMHC) which adds cost. 

• Interest rate & amortization: Higher interest = higher payment. Longer amortization = lower monthly payment but more interest over time.

• Regional cost differences: Living in the GTA vs smaller Ontario markets means different property taxes, condo fees and purchase prices — adjust your budget accordingly.

• Existing debt: Car loans, credit cards etc reduce your TDS capacity — pay these down if you can. 

• Stress test / qualifying rate: You must prove you can afford payments at a higher rate than your actual rate (to guard against interest rates rising). 

• Hidden/home-ownership costs: Maintenance, repairs, utilities, property tax increases — budget for these so your mortgage doesn’t become a burden.

Q1: “If I earn $100,000 in Ontario, how much home can I afford?”
There’s no single answer — but if we use a rough GDS of 30%: $100,000 × 30% = $30,000 annual housing cost budget (~$2,500 / month). Deduct property tax, utilities, insurance — the remainder goes to mortgage payment. Then consider your down payment, rate, amortization and debt to estimate purchase price.
Q2: “Does the lender only look at my income or also my debt?”
They look at both. Your income determines capacity; your debt reduces it. That’s why the TDS ratio is crucial.
Q3: “Can I borrow more if I increase my down payment?”
Yes. A larger down payment reduces the mortgage amount and may reduce default insurance cost — this means lower monthly payments, which improves affordability.
Q4: “What if interest rates go up?”
Great question. The stress test is designed to protect you from rate rises, but you should also build in a buffer in your budget so that you’re not squeezed if rates rise, property taxes increase or maintenance costs climb.
Q5: “Should I buy the most expensive home I qualify for?”
Usually no. While you may qualify for a certain amount, it’s wise to leave margin for savings, emergencies and lifestyle. A comfortable mortgage is better than a stretched one.