Income for a $300,000, $500,000 or $1 million mortgage
Start with the total loan you need, including any premium added to it. Each row below uses the same assumptions so the difference comes from the mortgage size. The final column adds $800 a month in other debt payments; it does not change the home or the rate.
| Total mortgage | Contract payment / month | Income: no other debts | Income: $800/month debts |
|---|---|---|---|
| $300,000 | $1,660 | $77,300 | $90,300 |
| $400,000 | $2,214 | $97,900 | $108,600 |
| $500,000 | $2,767 | $118,500 | $126,800 |
| $600,000 | $3,321 | $139,100 | $145,100 |
| $750,000 | $4,151 | $170,000 | $172,500 |
| $1,000,000 | $5,535 | $221,500 | $221,500 |
4.50% example contract rate; 6.50% qualifying rate; 25 years; monthly payments with Canadian semi-annual compounding; $4,200 annual property tax; $150/month heat; no condo fees. GDS 39%, TDS 44%. Income rounded up to the next $100. Payment rounded to the nearest dollar. These are fixed examples, not current lender offers.
How we calculate the income
First, calculate the mortgage payment at the qualifying rate. Add the property’s monthly carrying costs. Divide that housing total by the GDS limit to find one income requirement. Add the other monthly debt payments and divide by the TDS limit for the second requirement. Multiply each by 12 and use the higher annual amount.
For these examples, qualifying housing costs are the stress-test payment plus $500 a month for taxes and heat. Required annual income is the larger of (housing costs ÷ 0.39) × 12 and ((housing costs + debts) ÷ 0.44) × 12. The same calculation engine powers our public qualification tool and anonymous AI calculator tools.
The example rate is 4.50%, so the higher of 5.25% and contract rate plus two percentage points is 6.50%. You do not pay 6.50% in this example; it is the qualification calculation. Actual mortgage payments use the contract rate.
A $500,000 home is not a $500,000 mortgage
For a $625,000 home with $125,000 down, the base mortgage is $500,000. With a smaller down payment, an insurance premium may be added to the loan. Test the financed total, not just the price minus your deposit.
A purchase at $1.5 million or above generally requires at least 20% down and is outside the high-ratio insured price cap. Having that cash does not replace the lender’s income and property review. Keep closing costs and a reserve separate from the down payment.
What can change the answer?
Replace the generic tax and heating figures with the property’s actual costs. For a condo, include the fees and confirm the lender’s treatment. A rate change, different amortization or financed premium also changes the payment being tested.
The accepted income can differ from your current pay or business revenue. Before relying on a bonus, overtime, rent or self-employment income, ask which evidence and calculation the lender will accept. Two households earning the same total can have different document requirements.
Check qualification and comfort separately. Run a take-home-pay budget that includes groceries, childcare, transport, insurance, repairs and savings. A loan that fits a ratio can still leave too little room for your life.
Turn an example into a useful buying range
Open the qualification calculator with your proposed total mortgage, rate, amortization, income, debts and property expenses. Then use affordability to work in the other direction—from income and cash available to an estimated home price. Compare both results before setting a search budget.
For a BC purchase, our brokers can review the income documents and lender fit before you commit to an offer. Elsewhere in Canada, use these tools for education and confirm the financing with a professional licensed where the property is located.