An $80,000 salary puts many Canadians’ homeownership dreams within reach; however, income alone does not determine approval. Lenders convert your salary to monthly income, apply gross debt service and total debt service rules, factor in property taxes and heating, and then test your file against the mortgage stress test at a higher qualifying rate than your contract.

We’ll review what an $80K income means for your homeownership goals with realistic numbers using clear examples. You will see the difference between what you can afford and what you can qualify for, and how downpayment tiers and interest rate scenarios change the mortgage qualifying amount you can expect across insured, insurable, and uninsured options.

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Key Highlights

• Mortgage approval is capped by GDS and TDS, not income alone, and taxes and heating also limit the approval.
• Downpayment size affects default insurance premiums, rates, and ratio limits, increasing or decreasing the maximum qualifying amount.
• Mortgage affordability at your contract rate is not the same as qualification at the stress-tested rate.

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What Lenders Evaluate On An $80K Salary

Mortgage lenders start by converting $80,000 to about $6,667 per month, then they check whether your housing and total debt payments fit policy rules. Mortgage underwriters count the 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 loans.

Your gross monthly income is $80,000 ÷ 12 = $6,667. Lenders then test:

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

For insured files, mortgage default insurers typically allow up to 39% GDS and 44% TDS. While for uninsured files, most lenders typically use a maximum of 35% GDS and 42% TDS. These caps can vary depending on the lender, their mortgage underwriting guidelines, the borrower’s credit score, and the quality and credit risk indicators of their file.

The Mortgage Stress Test

All borrowers must qualify for the minimum qualifying rate (MQR). According to the Office of the Superintendent of Financial Institutions (OSFI), the minimum qualifying rate is “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%).”

What You Can Afford Versus Qualify on an $80K Salary

Mortgage affordability is the payment at your contract rate, which is what you actually pay. Qualification uses the higher stress-tested rate, which usually reduces the maximum compared with affordability. You may feel comfortable with the monthly payment based on your contract rate; however, the approval amount is determined by whether the stress-tested payment, plus taxes and heating, fits within the GDS and TDS limits.

The Monthly Costs Lenders Count

Before you estimate your budget, use the GDS and TDS 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 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 an $80K Salary

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

• Insured files use GDS 39% → $6,667 × 39% = $2,600
• Uninsured files use GDS 35% → $6,667 × 35% = $2,333
• 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 premiums based on LTV (for example, 90.01%–95% = 4%, 85.01%–90% = 3.1%)
  

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 payment at the contract interest rate on that same approval. Contract rates 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.

Insured with a 5% Down Payment

With 5% downpayment, the mortgage loan includes a CMHC premium of 4% on the base amount. The qualifying rate determines approval, not the contract rate. However, with the new mortgage rules, when it comes to qualifying for a mortgage renewal to switch lenders, the contract rate applies. 

Property taxes at 1% of the home price and $100 heating are counted in GDS, so higher home prices bring higher taxes, slightly limiting 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%	$370,156	$365,715	$1,734	$2,192	$308	$100	$2,600
3.5%	5.5%	$362,292	$357,944	$1,792	$2,198	$302	$100	$2,600
4%	6%	$347,269	$343,102	$1,811	$2,211	$289	$100	$2,600
4.5%	6.5%	$333,139	$329,141	$1,829	$2,222	$278	$100	$2,600
5%	7%	$319,844	$316,006	$1,847	$2,233	$267	$100	$2,600

How the Contract Rate Shapes Your Approval

Your contract rate sets your actual monthly payment and sets the qualifying rate used for the stress test, which is the greater of 5.25% or contract + 2%. For example, at a 4% contract rate, the qualifying rate is 6%. Lenders then check whether the qualifying payment, plus monthly property taxes and $100 heating, fits within the 39% GDS cap of $2,600 on an $80K salary. If that total payment is at or below $2,600, the approval is confirmed, as these mortgage amounts include the CMHC premiums for a high-ratio insured loan.

The table shows the resulting mortgage amount and monthly payment at both the contract and qualifying rates for each scenario, with property taxes assumed at 1% of the price annually.

What does this mean for an $80K salary?

Put simply, your contract rate determines both the qualifying amount and your mortgage payment, while taxes and heating consume part of the GDS room. When all three are balanced inside the 39% limit, approval follows. Based on the scenarios modelled, a borrower earning $80K can typically qualify to purchase a home between about $320K and $370K with 5% down, with the exact ceiling moving as interest rates change.

How would choosing a variable-rate mortgage affect the approval on my $80K salary?

A mortgage pre-approval on a variable rate is a snapshot that is stress-tested using today’s prime rate. If the prime rate rises before you convert the pre-approval to a live approval, your contract rate moves up, and the qualifying rate usually increases as well, since lenders test at the greater of 5.25% or contract + 2%. That leaves less room inside the same $2,600 GDS. For example, if your variable rate moved from 4% to 4.5%, the maximum home price would typically fall from about $347K to about $333K on an insured 5% downpayment file, a drop of roughly $14K. Conversely, if the rate fell by 0.25% to 3.75%, the ceiling would rise to about $355K. Building a buffer for a 0.25% to 1.0% rate swing helps protect your mortgage approval from rate volatility.

Insured with a 10% Down Payment

In this table, the default insurance premium rate drops to 3.1% as the down payment reaches 10%. That slightly reduces the financed amount compared to a 5% down payment and can increase the maximum purchase price. The approval is still driven by the stress-tested payment fitting under the same $2,600 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%	$391,007	$362,815	$1,721	$2,174	$326	$100	$2,600
3.5%	5.5%	$382,763	$355,166	$1,778	$2,181	$319	$100	$2,600
4%	6%	$367,010	$340,548	$1,798	$2,194	$306	$100	$2,600
4.5%	6.5%	$352,183	$326,791	$1,816	$2,207	$293	$100	$2,600
5%	7%	$338,225	$313,839	$1,835	$2,218	$282	$100	$2,600

Reading the pattern

As the down payment increases, the mortgage insurance premium rate drops compared to 5% down, which can slightly decrease the maximum purchase price. Even so, the approval is still set by the stress-tested payment fitting under the same $2,600 GDS cap.

Uninsured with a 20% Down Payment

For uninsured mortgage loans, the GDS cap is tighter at 35%, which equals $2,333 on an $80K salary. There is no mortgage default insurance premium added to the mortgage, 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%	$396,814	$317,452	$1,505	$1,902	$331	$100	$2,333
3.5%	5.5%	$388,616	$310,893	$1,556	$1,909	$324	$100	$2,333
4%	6%	$372,928	$298,343	$1,575	$1,922	$311	$100	$2,333
4.5%	6.5%	$358,140	$286,512	$1,593	$1,935	$298	$100	$2,333
5%	7%	$344,197	$275,357	$1,610	$1,946	$287	$100	$2,333

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 removes insurance premiums, many lenders apply tighter debt service ratio limits on uninsured files, which can offset the benefit. Conversely, high-ratio insured mortgages with less than 20% down often provide higher approvals, as they come with lower pricing and higher ratio limits.

What Moves Your Mortgage Qualifying Amount

Before you decide which path to take, focus on the factors that change the approval amount. Stronger credit can improve pricing and raise both affordability and qualification. Recurring payments on your credit report reduce TDS room, leaving less available for the mortgage you can qualify for, as this ratio is limited to 42% or 44%. 

Even a $300 to $400 monthly debt can lower the maximum purchase price by tens of thousands. Location matters as well. Property taxes and heating vary by city and province, which is why two households with the same $80K income can qualify for different amounts. Choosing your subject property in an area with lower municipal property taxes or a smaller, more efficient home can increase the room in your GDS with the same income.

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 About an $80K Mortgage Approval

Final Thoughts

An $80,000 salary can support homeownership in Canada, but the final number is set by debt ratios, monthly carrying costs, and the stress test rather than a simple multiple of income. Through examples, we illustrated why insured, insurable, and uninsured mortgage options behave differently and how results move across 3% to 5% interest rates. 

Connect with a nesto mortgage expert to compare your best option, model your GDS and TDS under multiple scenarios, and right-size your down payment across tiers. Expert advice turns a complex approval into a confident plan that supports your mortgage strategy and 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.

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

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