How Much Can I Afford to Spend on a Home in Toronto?

How much you can afford depends on your income, debt, down payment, and current mortgage rates, with most lenders capping housing costs at ~39% of gross income.

In Toronto, affordability isn’t just about list price; it’s about how much a lender will approve you for and how much you’re comfortable spending.

Lenders use two main ratios:

• Gross Debt Service (GDS): Housing costs (mortgage, taxes, heat, 50% of condo fees) should not exceed ~39% of gross income.
• Total Debt Service (TDS): All debt payments (housing + loans + credit cards) should not exceed ~44% of gross income.

Other factors:

• Down payment: Minimums are 5% up to $500K, 10% on the portion from $500K–$1.5M, and 20% for $1.5M+.
• Mortgage rates: Higher rates reduce your borrowing power.
• Stress test: You must qualify at the greater of the contract rate + 2% or the Bank of Canada benchmark (currently ~5–6%).

The Fox Marin Team connects clients with trusted mortgage advisors, ensuring you know your actual budget upfront so there are no surprises once you start shopping.

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