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Make more informed real estate decisions with our online tools. Most of us don’t have the time or interest to ‘crunch the numbers’ by hand. We’ve built these tools with Canadian home buyers and homeowners in mind, so you can better understand your real estate finances.

Last updated: April 22, 2022

Mortgage calculator

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Mortgage calculators and home affordability tools

What mortgage rates can I get? What mortgage rates are other people getting? How much mortgage can I afford to spend on a house? Get budget clarity with our mortgage payment calculator and other planning tools. It’s easy to try it yourself!

Before diving in and starting the house hunting process, it’s important to understand the mortgage affordability and financial impact of owning a home, and what your maximum purchase price is like.

A mortgage is a type of loan to buy a property, secured by that property. If you don’t repay your loan on time, it allows the lender to take possession. In other words, if you get a mortgage to buy your home, it is your home that acts as the loan collateral. Most people don’t have enough money to buy a house outright. A house also costs a lot of money, which means you can’t pay for it using a credit card or line of credit. A mortgage is typically a large loan, which requires borrowers to pay back a set amount on a monthly basis over a number of years.

How much mortgage can I afford? A good rule of thumb is that your monthly housing costs should be no more than 39% of your gross household income (the amount earned before subtracting taxes or other deductions).

To get approved, you’ll need to have:
  1. Proof of income, such as pay stubs or tax returns
  2. Proof of assets, such as bank statements or investment account statements
  3. Good credit, with a minimum score of 620
  4. Proof of identity, such as government-issued photo ID and your Social Insurance Number (SIN)
Gathering the required documents ahead of time will help make getting a mortgage a smoother and simpler process. You can typically download many of these documents through an online account manager from your bank, payroll provider, and the Canada Revenue Agency.

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It's easy to browse your available mortgages and lock in a low rate with Perch.

In general, aim to have a minimum credit score of 620 to be able to qualify at most lenders. According to Alex Leduc, CEO at Perch, with a credit score of 680 or above you should be able to qualify anywhere. The higher the credit score, the more lenders are willing to lend you money which translates into a better mortgage offer for you.

If you already have an ideal property and target price in mind, but aren’t sure if you can afford to buy, use our Mortgage Qualifier Tool to view your purchasing power.
The most commonly used sources for a down payment are:

Personal savings: Any money in your bank account, such as funds from your chequing, savings, TFSA, etc.

Stocks, mutual funds or other kinds of investment that can be sold within 60 days. Funds from your RRSP can also be used, but unless you are using your Home Buyer’s Plan (available only to first-time home buyers), you will need to pay withholding taxes when you take the funds out. The maximum amount you can withdraw under the Home Buyer’s Plan is $35,000.

Gifts: Your immediate family, such as a parent, sibling or child can give you money for your down payment.

Sale of a property: If you are selling your home in order to buy a new one, the equity (what’s left after you pay back the mortgage and all other expenses) is available to be used as a down payment, provided that you sell your home prior to buying the new one.

Borrower funds: In some cases, you can borrow money to supplement your current mortgage if you are short on financing.

While you won’t need the full down payment until your purchase closes, the seller will likely require you to put down a deposit. Make sure that you have the funds available when you start house hunting to put down as a deposit (your realtor will go over how much is required).

The minimum down payment required is based on the purchase price of your home.

How much down payment do I need to buy a home?

Purchase price

  • $500,000 or less

  • $500,000 to $999,999

  • $1 million or more

Minimum down payment required

  • 5% of the purchase price
  • 5% of the first $500,000 of the purchase price

    10% for any portion of the purchase price above $500,000
  • 20% of the purchase price
A high ratio mortgage has a down payment of less than 20% of the purchase price. In other words, the mortgage loan is higher than 80% of the value of the property. A low ratio mortgage, also known as a conventional loan, is one where the down payment is more than 20% of the purchase price.

Though it seems counterintuitive, high ratio mortgages are actually lower risk to lenders. This is because high ratio mortgages are required to have mortgage default insurance, and the buyer is responsible for the cost of this insurance.

Mortgage default insurance is also commonly referred to as CMHC insurance. This protects your lender in case you can’t make your mortgage payments. There are three mortgage insurance providers in Canada: Canada Mortgage and Housing Corporation (CMHC), Sagen and Canada Guaranty Mortgage Insurance Company.

Loan-to-value or LTV ratio is a common financial term used to describe the percentage of money borrowed to the purchase price. For example, if you are purchasing a property worth $700,000 with a down payment of $35,000 (equivalent to 5% of the purchase price), then you would have an LTV ratio of 95%.

You can figure out your LTV ratio using the table below. If your LTV ratio is more than 80%, then it is a high ratio mortgage.

What is my LTV ratio?

Down payment percentage

  • 5%
  • 10%
  • 15%
  • 20%
  • 25%

Loan-to-value (LTV) ratio

  • 95%
  • 90%
  • 85%
  • 80%
  • 75%

For home buyers, we offer tools to:

  • See what mortgage offers are available
  • Learn if you’re financially better off renting or buying
  • Calculate your monthly mortgage payments and total cost of borrowing
  • See if you can afford your target property and your maximum purchase price
  • Get an estimate of the closing costs you’ll need to keep in mind
  • Find out if the First-Time Homebuyer Incentive is worth it for your scenario

Just starting your home buying journey? Check out our detailed Guide to Buying A Home, which gives you the step-by-step breakdown of what to expect.

For homeowners, we offer tools to:

  • See what mortgage offers are available
  • View your amortization schedule and total cost of borrowing
  • Figure out the cost to breaking your existing mortgage and if it’s worth it to switch lenders to save money

When you sign up to Perch and add an existing owned property, you’ll be able to get monthly property valuation updates on one of the largest financial investments you’ll make in your lifetime.