How can I estimate my loan affordability before applying in Canada?

Step 1 — Calculate your debt-to-income ratio (DTI)

DTI = (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

Step 2 — Apply Canadian lender ratios

For mortgages specifically:

• GDS (housing only) must stay under 39%
• TDS (all debts) must stay under 44%
• Stress-tested at qualifying rate of 5.25% or contract + 2% (whichever is higher)

For personal loans:

• New payment shouldn't push your TDS above 44%
• Lenders also check that you have $1,500–$2,000+/month left after all debts

Step 3 — Run the math on your actual loan

Use the Affordability Calculator with:

• Gross annual income
• Existing monthly debt payments
• Desired loan term
• Estimated interest rate (from the AI Advisor's rate band)

It outputs your maximum comfortable borrowing amount and the trade-off between term length and total interest.

Affordability rules of thumb

Pro tip — borrow for comfort, not for max

Lenders qualify you on what you can theoretically afford — but you should borrow based on what leaves you a comfortable cash buffer. The Affordability Calculator includes a comfort margin setting so you can stress-test for rate increases or income changes.