A $100,000 salary provides strong borrowing capacity for a mortgage in Canada; however, income alone does not set your mortgage approval. Lenders translate your salary to monthly income, apply GDS and TDS debt service ratio limits, and include carrying costs like property taxes and heating costs before testing your file against the mortgage stress test at a higher qualifying rate than your contract rate.

We’ll illustrate how far a $100K income can go using realistic numbers and examples suited for today’s homebuyer. You will learn the difference between how much mortgage you can afford and how that differs from your qualifying mortgage amount. You’ll also understand how various downpayment and interest rate scenarios change the mortgage qualifying amounts across insured, insurable, and uninsured options.

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Key Highlights

• Approval is capped by GDS and TDS rather than salary alone, and lenders include property taxes and heating costs in these ratios.
• The down payment affects the mortgage default insurance premium, pricing, and ratio limits, effectively increasing or decreasing the maximum qualifying amount.
• Mortgage affordability at your contract rate differs from qualification at the stress-tested rate.

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What Lenders Evaluate on a $100K Salary

Lenders start by converting $100,000 to $8,333 per month, then they test whether your housing and total debt payments fit policy rules and limits. Mortgage underwriters count the entire carrying costs of the property, not just the mortgage, and they review recurring obligations on your credit report. High-ratio insured mortgages often allow slightly higher limits than conventional uninsured files, though file quality still matters.

Your gross monthly income is $100,000 ÷ 12 = $8,333. Lenders then test:

GDS includes mortgage principal and interest, property taxes, heating, and half of any applicable condo fees.
TDS considers all other monthly debts, such as spousal or child support, car payments, student loans, and lines of credit.

For insured files, mortgage default insurers commonly allow up to 39% GDS and 44% TDS. Canada Mortgage and Housing Corporation (CMHC) states, “GDS is the percentage of your monthly household income that covers your housing costs. It must not exceed 39%. TDS is the percentage of your monthly household income that covers your housing costs and any other debts. It must not exceed 44%.” For uninsured files, many lenders typically use 35% GDS and 42% TDS for their ratios, depending on a higher-scoring applicant’s credit score and the strength of the file. 

The Mortgage Stress Test

All borrowers must qualify for the minimum qualifying rate (MQR) defined by the Office of the Superintendent of Financial Institutions (OFSI) as “the greater of the mortgage contract rate plus 2% or 5.25%.” OSFI also clarifies that “the MQR has two components, the ‘buffer’ on the contract rate (currently 2%) and the ‘floor’ (currently 5.25%).”

In Canada, interest rates are shaped by the central bank’s monetary policy. As the Bank of Canada (BoC) explains, “the primary tool we use to control inflation is our target for the overnight rate, also called our policy interest rate.” Variable mortgage rates change in tandem with prime rates set by lenders. Fixed mortgage rates are set by changes in bond yields, which move based on expectations for the Bank of Canada’s ability to manage the inflationary pressures in Canada.

Differentiating Between Affordability Versus Qualification on a $100K Salary

Mortgage affordability is the monthly payment at your contract rate, which is what you actually pay. Mortgage qualification uses the higher stress-tested rate, which typically results in a lower maximum approval compared to what you can afford. Conversely, if interest rates or property taxes are lower than those used to calculate your baseline approval amount, then your stress-tested payment decreases, and your mortgage approval can rise without requiring a change to your income.

The Monthly Costs Affecting Your Mortgage Approval

Before you estimate your budget, use the GDS and TDS debt service ratios as anchors for the monthly costs that lenders always include. This practice prevents overestimating approval or being surprised by the approved amount after the mortgage is underwritten.

Property taxes

A practical baseline is 1% of the purchase price per year, divided monthly. Municipal property tax rates vary, so this is a conservative planning rule if you do not have a tax bill or MLS listing to confirm the exact value yet.

Heating

Underwriters assume at least $100 per month for a house and $60 per month for a condo. Heating costs for larger or older homes, or those located outside of the city, can run higher, especially if their furnaces are still running on propane or oil. Mortgage lenders have internal guidelines to calculate the heating costs based on property type and size.

Condo fees

If you buy a condo, lenders include 50% of the monthly fee in GDS. High condo fees can materially reduce the maximum purchase price even when the income, interest rate, and down payment remain unchanged.

As lenders calculate GDS with property taxes and heating costs included, it directly affects mortgage approval. Ignoring these costs inflates your estimated budget and can lead to disappointment at approval.

How the Math Works on a $100K Salary

Here is the calculation method to provide transparent math for our calculations:

• Insured files use GDS 39% → $8,333 × 39% = $3,250
• Uninsured files use GDS 35% → $8,333 × 35% = $2,917
• Monthly property tax = price × 1% ÷ 12
• Monthly heating = $100 (house baseline)
• Monthly payment available for principal and interest = GDS cap − taxes − heating
• Qualification uses the stress-test rate; affordability uses the contract rate
• Insured loans include CMHC premium per LTV (for example, 90.01%–95% = 4.00%, 85.01%–90% = 3.10%)

Examples to Suit Any Situation

These tables show the maximum purchase price and mortgage amount that meet the GDS limit at the qualifying rate, plus the monthly payment at the contract rate on that same approval. Contract rates we’ve used in our examples are 3%, 3.5%, 4%, 4.5%, and 5%, with qualifying rates at the greater of 5.25% or contract + 2%. 

Each row is recalculated so Qualifying Payment + Monthly Taxes + Heating = Max GDS. By solving for the qualifying monthly payment, we can work backwards to match that monthly payment to a mortgage amount.

Insured with a 5% Down Payment

With 5% downpayment, the loan includes a CMHC premium of 4% on the base loan amount. Property taxes, at 1% of the home price, and $100 heating costs are included in the GDS. Higher home prices bring higher property taxes, which slightly limit the mortgage payment. The compounding period is set to monthly (12 times per year), typically used for variable-rate mortgages (VRM) and adjustable-rate mortgages (ARM).

Contract Rate	Qualifying Rate	Max Home Price	Mortgage Amount incl. premium	Monthly Payment	Qualifying Payment	Monthly Taxes	Monthly Heating	Max GDS
3%	5.25%	$466,397	$460,800	$2,185	$2,761	$389	$100	$3,250
3.5%	5.5%	$456,487	$451,010	$2,258	$2,770	$380	$100	$3,250
4%	6%	$437,559	$432,308	$2,282	$2,785	$365	$100	$3,250
4.5%	6.5%	$419,755	$414,718	$2,305	$2,800	$350	$100	$3,250
5%	7%	$403,003	$398,167	$2,328	$2,814	$336	$100	$3,250

How the Contract Rate Shapes Your Approval

Your contract rate influences two key factors: it determines your actual monthly payment and the qualifying rate. The mortgage is stress-tested using the minimum qualifying rate (MQR), which is the greater of 5.25% or the contract rate plus 2%. For instance, at a 5% contract rate, the qualifying rate is 7%, but it’s limited to 5.25% on a 3% contract rate. Mortgage lenders then test whether the qualifying payment, plus monthly property taxes and $100 heating, fits within the 39% GDS cap of $3,250 on a $100K salary.

If that total stays at or below $3,250, the approval is confirmed, and the mortgage amount is calculated. For an insured 5% down payment file, the approved mortgage amount includes the default insurance premium at 4% of the base loan. In the table, you’ll see the resulting mortgage amount and monthly payment at both the contract and qualifying rates for each scenario, with taxes assumed at 1% of the price annually.

What does this mean for a $100K salary?

The contract rate determines both the qualifying amount and your mortgage payment, while taxes and heating reduce the GDS space. With those inputs kept inside the 39% cap, approval follows. Across the insured 5% down scenarios, a borrower earning $100K can typically qualify for a home between about $403K and $466K, with the mortgage amount fluctuating with interest rate change.

How would choosing a variable rate affect the approval on my $100K salary?

Variable mortgage pre-approvals are snapshots dependent on the prime rate when the preapproval is completed. If the prime rate increases before your offer to purchase is accepted, your contract rate and qualifying rate rise, squeezing the $3,250 GDS room. For example, moving from 4% to 4.5% lowers the insured mortgage with a 5% downpayment from about $437K to $419K, reducing your approval amount by $18K. If the rate instead falls to 3.5%, your qualifying amount increases to roughly $456K, that’s $19K more for your mortgage approval than at 4%.

Insured with a 10% Down Payment

When the down payment reaches 10%, the premium rate drops to 3.10% on the base loan amount. That slightly reduces the financed amount compared to a 5% down payment and can increase the maximum home price. The approval is still driven by the stress-tested payment fitting under the same $3,250 GDS cap.

Contract Rate	Qualifying Rate	Max Home Price	Mortgage Amount incl. premium	Monthly Payment	Qualifying Payment	Monthly Taxes	Monthly Heating	Max GDS
3%	5.25%	$492,668	$457,147	$2,168	$2,739	$411	$100	$3,250
3.5%	5.5%	$482,282	$447,509	$2,240	$2,748	$402	$100	$3,250
4%	6%	$462,432	$429,091	$2,265	$2,765	$385	$100	$3,250
4.5%	6.5%	$443,751	$411,756	$2,289	$2,780	$370	$100	$3,250
5%	7%	$426,163	$395,437	$2,312	$2,795	$355	$100	$3,250

Reading the Pattern

As the down payment increases, the default insurance premium falls, which slightly increases your qualifying amount at the same rate. However, if you carry other monthly debts that push TDS near its cap, the insured advantage can narrow because TDS, not GDS, becomes the limiting factor.

Uninsured with a 20% Down Payment

On uninsured mortgages, the GDS cap tightens to 35%, which equals $2,917 on a $100K salary. There is no default insurance premium added to your mortgage balance once your downpayment is 20% or more, as these types of mortgages are not insured against borrower default. Lenders typically price their uninsured loans with a higher interest rate due to undertaking this default risk themselves. Lenders may use stricter ratios or pricing on uninsured files, so a larger down payment does not automatically produce the highest mortgage approval.

Contract Rate	Qualifying Rate	Max Home Price	Mortgage Amount	Monthly Payment	Qualifying Payment	Monthly Taxes	Monthly Heating	Max GDS
3%	5.25%	$500,535	$400,428	$1,899	$2,400	$417	$100	$2,917
3.5%	5.5%	$490,193	$392,155	$1,963	$2,408	$408	$100	$2,917
4%	6%	$470,405	$376,324	$1,986	$2,425	$392	$100	$2,917
4.5%	6.5%	$451,752	$361,401	$2,009	$2,440	$376	$100	$2,917
5%	7%	$434,164	$347,331	$2,030	$2,455	$362	$100	$2,917

Why 20% Down Does Not Always Mean the Highest Approval

A 20% down payment does not always translate to a higher mortgage approval. While it doesn’t require you to pay default insurance premiums, many lenders apply tighter GDS and TDS limits on uninsured files, which can offset the benefit. High-ratio insured mortgages with less than a 20% down payment can sometimes qualify for higher amounts because they often combine lower pricing with higher ratio limits.

What Changes Your Mortgage Approval

Before you decide which path to take, focus on the factors that change the approval amount. A stronger credit score can improve pricing and raise both affordability and qualification. If you have recurring payments on your credit file, the TDS room shrinks and the mortgage you can qualify for drops. Even a $300 to $400 monthly debt payment can lower the maximum purchase price by tens of thousands. Conversely, some buyers qualify for more by choosing a city with lower property taxes or by targeting a smaller, more efficient home that reduces heating costs.

Condo Scenario Impact on GDS

Condo buyers often underestimate how maintenance fees affect their GDS. Lenders count 50% of the monthly fee in GDS and assume a minimum of $60 for heating costs in condos. Compared with a similar house approval at the same rate, a $400 monthly condo fee adds $200 to GDS and trims the room available for the mortgage payment by the same amount. This change can lower the maximum price even if your income, interest rate, and down payment remain unchanged.

How TDS Changes Approval

TDS can become the binding limit when other credit bureau or non-household debts are present. On a $100K insured file, 44% TDS equals $3,667. If GDS is set at the full $3,250, there is about $417 of room left for all other debts. A $350 car payment plus a $50 student loan or credit card minimum payment would fully use that space, which means any increase in non-household debts requires lowering the housing costs to bring TDS back under its cap. For this reason, paying down recurring balances before applying can meaningfully increase approval.

Today’s Mortgage Rates

Since the minimum qualifying rate (MQR) is the greater of your contract rate plus 2% or 5.25%, approval amounts adjust in line with market pricing. Check today’s insured and uninsured options using nesto’s best mortgage rates in Canada. You can calculate both contract and stress-tested monthly payments in a mortgage payment calculator. Or skip multiple steps by starting with a mortgage affordability calculator, as it already incorporates the Canadian mortgage stress test.

Frequently Asked Questions (FAQ) About a $100K Mortgage Approval

Final Thoughts

A $100,000 salary can support homeownership in Canada. Still, the final number is set by your debt service ratios, monthly carrying costs, and the Canadian mortgage stress test rather than a simple multiple of income. Through examples, we illustrated why high-ratio insured, conventional insurable and uninsured mortgage options behave differently and how the mortgage approval amount changes across interest rates ranging from 3% to 5%.

Connect with a nesto mortgage expert to understand the options available for your best mortgage strategy. Our expert advice will turn complex approval into a confident plan that supports your long-term goals.

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Why Choose nesto

At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned, salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

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