How much house can I afford in Calgary?

What are GDS and TDS mortgage ratios?

Gross debt service (GDS) compares the lender’s qualifying housing costs with your accepted income before tax. Total debt service (TDS) adds the other debt obligations the lender must assess. Both are percentages. Use monthly costs with monthly income, or annual costs with annual income, consistently.

GDS = qualifying housing costs ÷ gross qualifying income × 100.
TDS = (qualifying housing costs + other assessed debts) ÷ gross qualifying income × 100.

These are Canadian lending calculations, not separate Calgary rules. They help the lender assess repayment capacity; they do not replace a cash budget for your household.

Which housing costs and debts count?

FCAC’s mortgage-preparation guidance includes mortgage payments, property taxes, heating and, where applicable, 50% of condo fees in housing costs. For qualification, the mortgage payment may be calculated at the stress-test rate rather than your contract rate.

TDS also considers obligations such as car loans, credit cards, lines of credit, student loans and support payments. Ask the broker for the lender-assessed payment on each debt; it may differ from the minimum payment you currently make. If you keep the old home, its debt and relevant expenses must also be accounted for under the lender’s rules.

Your cash budget should include the full condo fee, insurance, other utilities, maintenance and regular living costs. Some of these costs are treated differently in underwriting. A ratio that fits the lender’s limit can still leave too little room for your day-to-day budget.

A worked example: GDS can fit while TDS does not

Assume gross qualifying household income of $10,000 a month, or $120,000 a year, and the following hypothetical lender-assessed amounts. This is a one-home illustration; it is not a mortgage quote.

GDS: $3,750 ÷ $10,000 × 100 = 37.5%.
TDS: $4,450 ÷ $10,000 × 100 = 44.5%.

Using CMHC’s published 39% GDS and 44% TDS limits, the GDS result is below the limit but TDS is above it. At 44%, the total assessed monthly obligations would need to be no more than $4,400 with this income. Reducing them by $50 would bring this example to 44%; all other approval requirements would still apply.

Are 39% GDS and 44% TDS universal lender limits?

CMHC publishes maximum ratios of 39% GDS and 44% TDS for its mortgage-insurance criteria. They are useful reference points, not a promise that every lender or mortgage product will approve those ratios.

The lender, insurer and loan program can affect the permitted ratios and how income or debts are recognized. Credit history, income documentation, down-payment source and the property also matter. Ask your broker which limits and calculation method apply to your actual application.

Keep two budgets: the lender’s assessed borrowing range and the monthly cost you are comfortable carrying. Don uses your confirmed price range and preferred budget to focus the Calgary home search.

How is the mortgage stress test different from GDS and TDS?

GDS and TDS compare costs with income. The stress test changes the mortgage payment used to qualify, by using a higher interest rate where required. It does not mean your contract payment is charged at that higher rate.

As checked October 8, 2026, OSFI’s uninsured-mortgage minimum qualifying rate is the greater of the contract rate plus two percentage points or 5.25%. FCAC also explains the stress test for bank mortgages. For an illustrative 4.5% contract rate, the qualifying rate would be 6.5%, not 5.25%, under that rule.

The lender uses the applicable qualifying payment in its assessment. OSFI has a specific exemption from its prescribed minimum rate for qualifying uninsured straight switches between federally regulated lenders at renewal, without increasing the loan amount or amortization. That is different from buying the next home, and the receiving lender still assesses repayment capacity.

How does rental-income add-back affect GDS and TDS?

If you plan to keep the current home as a rental, some lenders may accept projected market rent to help qualify the next purchase. CMLS’s income guide allows a 50% rent add-back for outside rentals on applicable uninsured mortgages and an economic-rent letter from a CMLS-approved appraiser when a current lease is unavailable. Have the broker confirm your rental plan, product and documentation.

Illustrative add-back: accepted monthly rent of $2,800 × 50% = $1,400 added to monthly qualifying income. This is income for the calculation, not an extra $1,400 you can spend on the new mortgage.

Consider a separate illustration with $10,000 monthly qualifying income and a 44% TDS ceiling. The ceiling is $4,400. If an approved add-back raises that income to $11,400, the ceiling becomes $5,016. The increase is $616, calculated as $1,400 × 44%, holding all other inputs fixed.

This is an increase in the total assessed-obligation ceiling, not an approved new mortgage payment. Existing mortgages, other debts and applicable property expenses still use that capacity. GDS or another lending requirement may be the tighter constraint.

Add-back and rental offset are different. Add-back includes accepted rent in qualifying income. An offset applies accepted rent against the rental property’s assessed carrying costs; a shortfall may still count against you. Net-rental methods use the relevant expenses to assess a surplus or shortfall. Do not combine these methods or count the same rent twice.

RBC’s next-home guidance describes a market-rent assessment and a percentage-based treatment of projected rent, and notes that HELOC borrowing affects TDS. The calculation and accepted evidence depend on the lender. Projected income does not release equity for your down payment.

For the financing choices, bridge costs and questions about an unsold current home, read buying and selling at the same time in Calgary.

What should you bring to the mortgage broker?

• Income documents, current mortgage details and balances for other debts.
• Your down-payment source, available cash and expected closing costs.
• The target purchase price, property taxes, heating costs and any condo fees.
• If keeping the old home, its mortgage and HELOC balances, expenses, rental plan and the rent evidence the lender requests.
• Both planned closing dates and the conditions that must be satisfied before funding.

Ask the broker to show the GDS and TDS calculation, applicable limits, qualifying interest rate and remaining approval conditions. If you are selling to buy, Don can prepare a value range and selling-cost estimate for the current home first. Use the home-budget guide and mortgage payment calculator alongside that assessment.