Income is a critical component to getting approved for a mortgage.  There are various income approaches around applicant’s who are self-employed, so it is best to consult with a Mortgage Broker before putting in an offer.  Here are some general guidelines to help you understand how much you may qualify for.

How much income do you need to qualify for a $400,000 mortgage? 

To qualify for a $400,000 mortgage, you would need approximately $90,000 in qualifiable gross household income.  This estimate is based on qualifying at the Bank of Canada 5-year benchmark rate which is currently set at 5.25%.  It should be noted that this is not the rate you will pay for your mortgage, but it is the qualification standard set forth by the government to ensure reasonable future mortgage affordability.  This estimate also assumes the purchase is hi-ratio (less than 20% down) with annual property taxes at $4,000 and $100 per month for heat. 

To determine your purchase price, you would add your down payment amount to the $400,000 mortgage figure.

Can I get 5 times salary mortgage?

Based on the example above, $90,000 of gross household income would qualify for approximately 4.44 times in mortgage.  

There are additional considerations besides income.  Buyers should also be aware of the closing costs required.

How much is a good down payment?

The amount of down payment does not affect how big a mortgage you can get approved for, but it will affect how much house you can purchase.  The minimum down payment required if 5% of the purchase price.  This applies to all borrowers (not just first-time home buyers) purchasing an owner-occupied property with no more than two units.  For an owner-occupied triplex or fourplex, the minimum down payment is 10% of the purchase price.

Regardless of your down payment amount, your current income and debt obligations will affect your overall purchasing power.  Therefore, some buyers may need a larger down payment to meet the maximum affordability guidelines set by the government.  It always looks good to a lender when borrower’s have more “skin-in-the-game”.  It shows they are serious about purchasing a home.  Here’s a great article we found that you can reference for additional information.

When planning to purchase or refinance, there are lots of online resources available.  Knowing how much house you can get approved for BEFORE you go shopping and especially before you put in an offer is a great idea.  Check out our great mortgage calculator to help you understand how much mortgage you can afford.  Please download our My Mortgage Planner app – it has tons of useful information from land transfer tax estimators to online pre-approvals.  If you’d like help or more information you can email us at or book a no obligation consultation.

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