How to find out how much mortgage you can get?
Determining the maximum mortgage amount you can qualify for in Calgary is one of the most important steps in the home buying process. This knowledge not only helps you set a realistic budget for your property search, but also allows you to prepare for negotiations with sellers and plan your finances for the long term. In the Canadian mortgage system, there are several key factors that affect the size of your loan, including your income, existing debts, credit history, down payment size, and current interest rates.
Basics of calculating mortgage affordability
Canadian lenders use a complex assessment system to determine the maximum mortgage amount you can obtain. This system is based on the principle that your housing expenses should not exceed a certain percentage of your gross income and that your total debt obligations should also remain within acceptable limits.
Ratehub.ca emphasizes that determining how much mortgage you can afford depends on several factors, including your income, existing debt, and the size of your down payment. Canadians typically need an income that is 3.5 to 4 times the amount of the mortgage with a 20% down payment.
The role of gross income in calculations
Your gross annual income is the basis for all mortgage affordability calculations. Lenders consider the income of all mortgage applicants, including salary, bonuses, and additional sources of income. TD Bank notes that annual income is the amount you earn before taxes, also known as gross income.
According to nesto, the average annual income required to qualify for a mortgage in Calgary is $114,691 as of 2025, representing an increase from $109,247 in the previous year. This increase reflects changes in housing prices and interest rates in the region.
Debt service ratios
Gross debt service ratio (GDS)
The gross debt service ratio (GDS) is one of the most important metrics lenders use to assess your creditworthiness. The GDS is calculated by dividing your monthly housing expenses by your monthly gross income.
Housing expenses include:
- Mortgage payments (principal and interest)
- Property taxes
- Heating costs
- 50% of condominium fees (if applicable)
CMHC sets the maximum GDS at 39% for insured mortgages. This means that your housing expenses must not exceed 39% of your gross income.
Total debt service ratio (TDS)
The total debt service ratio (TDS) includes all of your debt obligations, not just your housing expenses. The TDS is calculated by adding all of your other monthly debt payments to your GDS.
Additional debts include:
- Credit card payments
- Car loans
- Lines of credit
- Alimony payments
- Student loans
- Any other contractual obligations
CMHC sets the maximum TDS at 44% for insured mortgages. Ratehub notes that while the guidelines indicate maximums of 32% for GDS and 40% for TDS, most borrowers with good credit qualify at higher ratios.
Mortgage stress test
What is a stress test
A mortgage stress test is a federal requirement in Canada designed to ensure that borrowers can afford their mortgage payments even if interest rates rise. This test assesses risk by requiring borrowers to qualify at a rate higher than their contract rate.
Genesis Group explains that when you apply for a mortgage, the lender looks at two things: your contractual rate and the higher qualifying rate. They pretend that you will be paying this higher rate every month, and if you can afford it at this higher rate, you pass the stress test.
Current stress test rules
As of 2025, the minimum qualifying rate is 5.25% or your contract rate plus 2%, whichever is higher. nesto emphasizes that this test remains in place to ensure the financial stability of borrowers and lenders.
Who must take the test:
- Homebuyers with a mortgage from a federally regulated lender
- Individuals refinancing an existing mortgage
- Those taking out a new home equity line of credit (HELOC)
Exceptions include renewing a mortgage with the same lender with no change in the amount or amortization term.
Current price trends in Calgary
Average home prices in 2025
Understanding the current housing market in Calgary is critical to setting realistic expectations for a mortgage. WOWA reports that in July 2025, the average and median home prices in Calgary were $616,686 and $569,500, respectively, up 1.7% and 1.2% from the previous year.
nesto provides a more detailed breakdown for July 2025:
- Average home sale price: $577,900 (down 1.8% year-over-year)
- Detached homes: $693,000 (up 0.2%)
- Townhouses/multiples: $458,300 (down 2.4%)
- Condominiums: $335,200 (down 4.6%)
Home With Michel reports slightly higher figures for May 2025, with an average price of $646,743 for all types of housing. Detached homes reached an average price of $769,300, representing a 2.4% increase over the previous year.
Down payment requirements
The size of your down payment directly affects the amount of mortgage you can obtain. The Canadian government sets minimum down payment requirements:
- 5% for homes up to $500,000
- 5% of the first $500,000 and 10% of the amount over $500,000 for homes between $500,000 and $1,499,999
- 20% for homes $1,500,000 or more
Calculation example for a $600,000 home in Calgary:
- First $500,000 × 5% = $25,000
- Remaining $100,000 × 10% = $10,000
- Total minimum down payment = $35,000
CMHC mortgage insurance
When is insurance required
If your down payment is less than 20% of the purchase price of the home, you will need to purchase CMHC default mortgage insurance. This insurance protects the lender in the event that you default on your mortgage obligations.
Calculating insurance premiums
CMHC insurance premiums are calculated as a percentage of the mortgage amount:
| Down payment amount | Insurance premium |
|---|---|
| 5% - 9.99% | 4.00% |
| 10% - 14.99% | 3.10% |
| 15% - 19.99% | 2.80% |
Calculation example for a home valued at $300,000 with a down payment of $40,000:
- Down payment percentage: 13.33%
- Mortgage amount: $260,000
- Insurance premium: $260,000 × 3.10% = $8,060
- Total mortgage amount: $268,060
Practical calculation examples
Example 1: $350,000 condominium
For a $350,000 condominium in Calgary with a 5% down payment ($17,500):
- Mortgage amount before insurance: $332,500
- CMHC insurance premium (4.00%): $13,300
- Total mortgage amount: $345,800
With current rates around 4.5% and a 25-year amortization, the monthly payment would be approximately $1,920. Adding property taxes ($175/month) and heating ($100/month), total housing costs would be approximately $2,195/month.
Required gross income: $2,195 × 12 ÷ 0.39 (maximum GDS) = $67,538 per year
Example 2: Detached house for $700,000
For a detached house for $700,000 with a 10% down payment ($70,000):
- First $500,000 × 5% = $25,000
- Remaining $200,000 × 10% = $20,000
- Minimum down payment: $45,000
With a down payment of $70,000 (10%):
- Mortgage amount before insurance: $630,000
- CMHC insurance premium (3.10%): $19,530
- Total mortgage amount: $649,530
At a rate of 4.5% and 25-year amortization, the monthly payment would be approximately $3,607. Adding taxes ($350/month) and heating ($150/month), total housing costs would be approximately $4,107/month.
Required gross income: $4,107 × 12 ÷ 0.39 = $126,374 per year
Tools and calculators
Online affordability calculators
Most major Canadian banks and mortgage companies offer free online calculators to determine mortgage eligibility. WOWA offers a calculator that takes into account the 2025 CMHC rules and current interest rates.
TD Bank provides an interactive calculator that shows how various factors affect your affordability, including property location, income, down payment, and monthly expenses.
Stress test calculators
nesto and WOWA offer special stress test calculators to help you determine if you can qualify for higher rates. These tools use the current minimum qualifying rate of 5.25% or your contract rate plus 2%.
Pre-approval process
Benefits of pre-approval
Mortgage pre-approval is a critical step in the home buying process in Calgary. Hello Mortgage emphasizes that pre-approval gives you a clear advantage by securing your borrowing capacity and interest rate.
Rock Solid Mortgages notes that the pre-approval process is completely free and does not commit you to any specific lender. However, it allows you to lock in an interest rate for your future purchase and protects you from any rate increases while you search.
Required documents
For pre-approval, you will need:
- Proof of income
- Employment history
- Credit information
- Proof of identity
- Proof of down payment
- Information about current debts and expenses
Mortgage Group Calgary emphasizes that self-employed individuals require additional documentation, including two years of tax returns and two years of Notice of Assessment (NOA) statements.
Strategies to increase your mortgage eligibility
Increase your down payment
A larger down payment can significantly increase your affordability. Ratehub explains that a larger down payment reduces the size of the loan, allowing you to get better interest rates and increase your borrowing power.
Benefits of a larger down payment:
- Avoid CMHC mortgage insurance with a down payment of 20% or more
- Lower monthly payments
- Better interest rates
- More equity in your property from the start
Improved credit rating
Your credit rating directly affects the interest rates you are offered, which in turn affects your affordability. Higher credit ratings usually result in lower interest rates, which can increase affordability.
Reduce existing debt
Paying off credit cards, car loans, and other debts can significantly improve your TDS ratios and increase the amount of mortgage you can qualify for. Calgary Mortgage Shop recommends considering debt consolidation before applying for a mortgage.
Consider a longer amortization period
Increasing the amortization period can lower your monthly payments, making your mortgage more affordable. However, this will result in paying more interest over time. First-time buyers and those purchasing new homes may qualify for a 30-year amortization instead of the standard 25 years.
Work with professionals
Mortgage brokers in Calgary
Mortgages for Less emphasizes the importance of working with qualified mortgage professionals in Calgary. The process usually begins with an introductory call with a qualified Calgary mortgage broker to discuss your homeownership goals, financial situation, and any specific requirements.
Rock Solid Mortgages notes that in 15 minutes, they can tell you the maximum mortgage amount you qualify for. Starting a relationship with a mortgage broker should be the first thing you do when you begin looking at real estate.
Banks and credit unions
National Bank offers both pre-qualification and pre-approval for mortgages. Pre-qualification is an estimate of your borrowing capacity based on basic financial information without a credit check.
CIBC and TD Bank also provide comprehensive calculators and pre-approval services that can help determine your affordability and set a realistic budget for your home purchase.
Current interest rates in Calgary
Rates as of 2025
Everyrate reports that current interest rates in Calgary for 5-year fixed mortgages range from 3.85% to 4.49%. Home With Michel notes a range of 3.7% to 4.49% for fixed rates and 4.05% to 4.65% for variable rates as of May 2025.
Rate forecasts
Everyrate forecasts that the 8-month forecast shows 5-year fixed rates around 3.85%, with potential declines before stabilizing around this level. Two Bank of Canada rate cuts totaling 0.50% are expected over the next 12 months.
Determining the amount of mortgage you can get in Calgary requires careful consideration of many factors, including your income, existing debts, credit history, down payment size, and current market conditions. Using online calculators can provide an initial estimate, but working with qualified professionals will ensure the most accurate assessment and the best options for your specific situation. Remember that pre-approval not only helps you establish your budget, but also makes you a more competitive buyer in the Calgary real estate market.