Before you fall for a listing, it helps to know the number a lender will actually approve — and it’s rarely the one in your head.
Two ratios decide most of it
Lenders weigh your Gross Debt Service ratio — housing costs (mortgage, property tax, heat and half of any condo fees) against your gross income, usually capped near 39% — and your Total Debt Service ratio, which adds car loans, credit cards and student debt, capped near 44%. The lower limit wins.
The stress test
You have to qualify at the higher of your contract rate plus 2%, or 5.25% (the federal stress-test floor). So a 5.25% mortgage is tested at roughly 7.25%. It shrinks your maximum today, but it also protects you if rates climb by renewal.
Your down payment moves the ceiling
Five percent on the first $500,000 and ten percent on the portion above it, for homes under $1.5 million; at $1.5 million or more, twenty percent of the whole price. More down means a smaller loan, no CMHC premium past 20%, and a lower payment — all of which raise the price you can qualify for.
Why Edmonton buyers have an edge
Alberta charges no land transfer tax — only modest registration fees — so closing costs are far lower than in Toronto or Vancouver. More of your budget goes into the home itself.
The cleanest first step is a pre-approval. We’ll connect you with a trusted broker and translate the number into neighbourhoods that actually fit.