Income Needed for a Home

"How much do I need to make?" is the same GDS/TDS math as "what can I afford?" run the other way. Instead of starting with your income and finding the ceiling, this starts with a price you already have in mind and finds the floor: the smallest gross household income that still clears the mortgage stress test at that price, that down payment, and that rate.

What it answers, and what it doesn't

It answers: the minimum gross household income the calculator's 32% GDS / 40% TDS thresholds require at your target price, down payment, rate and amortization, qualifying on the mortgage payment alone at the stress-test rate. It shows both ratios separately so you can see which one is actually the tighter test at your numbers.

It does not answer whether a specific lender will approve you at that income, or what property tax, heat, and condo fees would add to a real GDS calculation. This calculator's GDS/TDS are qualified on the mortgage payment alone, the same disclosed simplification the What Can I Afford? calculator makes for the max-price version of this same math. Treat the income figure here as a floor a lender is unlikely to accept less than, not a guaranteed approval at exactly that number.

Every input, explained

Target home price. The price you're trying to qualify for: a specific listing, a neighbourhood benchmark, or a number from a market page.

Down payment. Enter it as a percentage or switch to dollars. Canada's minimum rises with price: 5% up to $500,000, 10% on the slice above that, 20% at $1.5 million or more. A bigger down payment shrinks the mortgage, which shrinks the qualifying payment, which lowers the income you need.

Province. Only changes one thing here: whether sales tax applies to the CMHC premium shown below (Ontario, Quebec, Saskatchewan, Manitoba tax it; the rest don't). The GDS/TDS income math itself is the same federal rule everywhere in Canada.

Contract rate. Your best-guess mortgage rate. The calculator runs the stress test on top of it: the higher of this rate plus two points, or the 5.25% floor.

Amortization (years). Longer amortization spreads the qualifying payment thinner, which lowers the income needed. Try both 25 and 30 to see the gap.

Other monthly debts. Every recurring payment already on your file: car loan, student loan, credit card minimums, lines of credit. These only bite when TDS is the tighter of the two ratios. See the worked example below for a case where they flip which ratio binds.

How the math works

Start from the mortgage: target price minus down payment. Run that mortgage through the stress-test rate over your amortization to get the qualifying monthly payment: exactly what What Can I Afford? caps at 32%/40% of income, just computed in the opposite direction here. Two income floors follow directly: GDS needs income = qualifying payment × 12 ÷ 0.32; TDS needs income = (qualifying payment + your debts) × 12 ÷ 0.40. Whichever number is larger is the one that actually binds. It takes more income to clear that ratio than the other, so that's the real floor a lender applies.

Worked example: $700,000 home, 10% down, $500/month in debts

Down payment: 10% of $700,000 = $70,000. Mortgage: $700,000 − $70,000 = $630,000.

Stress test: at a 4.49% contract rate, the qualifying rate is the higher of 4.49% + 2% = 6.49% and the 5.25% floor, so 6.49%. Qualifying monthly payment on $630,000 over 300 payments (25 years) at that rate: $4,216.

GDS floor: $4,216 × 12 ÷ 0.32 = $158,103. TDS floor: ($4,216 + $500) × 12 ÷ 0.40 = $141,482. GDS is the higher number, so GDS binds. The minimum household income is $158,103.

At 20% down instead ($140,000 down, $560,000 mortgage), the same calculation lands at $140,536, about $17,600 less, entirely from the smaller mortgage. Push debts up to $2,000/month at 10% down and TDS overtakes GDS: the requirement jumps to $186,482, all of it TDS now doing the binding.

Provincial quirks and edge cases

The income floor is federal; the CMHC line is provincial. GDS/TDS and the stress test are the same OSFI rule everywhere. The only province-specific number on this page is the sales tax on the CMHC premium: Ontario (8%), Quebec (9%), Saskatchewan (6%) and Manitoba (7%) charge it, and the rest don't.

Credit unions aren't bound by the same test. Provincially regulated credit unions don't have to apply OSFI's B-20 stress test, though most run something similar. Don't assume a lower income clears you at a credit union without asking their actual policy.

Two incomes, two sets of debts. If a co-borrower's income is what gets you to the floor above, their debts come with it. There's no way to use someone's income without their obligations counting against TDS too.

A real lender's floor is usually higher. Because this qualifies on the mortgage payment alone, a lender who folds in property tax, heat and condo fees will ask for more income than the figure above. Treat this as the minimum, not the number to walk into a bank with.

Questions to ask your mortgage broker

1. At this price and down payment, which ratio actually binds for me, GDS or TDS, and how much room do I have above the floor?
2. How much would paying off one specific debt change the income you need to see from me?
3. If I put another 5% down, how much less income would I need to qualify at this price?
4. Does your GDS calculation include property tax and heat, and how much would that add to the number this calculator gives me?