A $90,000 salary affords many Canadians considerable purchasing power; however, income alone does not guarantee approval. Lenders convert your salary to monthly income, apply gross debt service and total debt service limits, include property taxes and heating, and then test your file against the mortgage stress test at a higher qualifying rate than your contract rate.

We’ll review what that means for a $90K income in realistic numbers using clear examples. You will see the difference between what you can afford and what you can qualify for, and how your downpayment and interest rate options change the qualifying mortgage amount across insured, insurable, and uninsured options.

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Key Highlights

• Approval is capped by GDS and TDS ratios, not income alone, and taxes and heating are counted in their calculation.
• The size of the down payment affects default insurance premiums, pricing, and ratio limits, and can increase or decrease the maximum approval amount.
• Mortgage affordability at your contract rate is not the same as mortgage qualification at the stress-tested rate.

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What Lenders Evaluate on a $90K Salary

Mortgage lenders start by converting $90,000 to $7,500 per month, then they check whether your housing and total debt payments fit within these limits. Mortgage underwriters count the carrying costs of the property, not just the mortgage principal and interest components, and they review recurring debt obligations on your credit report. High-ratio insured mortgages allow slightly higher ratio limits than conventional uninsured loans, although file quality and credit risk still matter.

Your gross monthly income is $90,000 / 12 = $7,500. 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 allow up to 39% GDS and 44% TDS. For uninsured files, many lenders use up to 35% GDS and 42% TDS. These caps can vary by lender, credit score, and the strength of the file.

The Mortgage Stress Test

The Canadian mortgage stress test requires that all borrowers must qualify for the minimum qualifying rate (MQR). The Office of the Superintendent for Financial Institutions (OSFI) defines it as “the greater of the mortgage contract rate plus 2% or 5.25%.” OSFI also explains that “the MQR has two components, the ‘buffer’ on the contract rate (currently 2%) and the ‘floor’ (currently 5.25%).” These rules create a gap between the payment you actually make at the contract rate and the payment used to set your approval at underwriting.

Afford Versus Qualify on a $90K Salary

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

The Monthly Costs Lenders Count

Before you estimate a budget, consider these monthly costs lenders always include when qualifying you. This practice prevents overestimating approval or being surprised by underwriting when a file is stress-tested.

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 yet.

Heating

Underwriters assume at least $100 per month for a house and $60 per month in heating costs for a condo. Larger homes or colder regions can run higher. Lenders have internal methods to calculate heating costs based on property type and size, as well as whether the furnace is powered by oil or propane, which are typically costlier than electricity.

Condo fees

If you buy a condo, lenders include 50% of the monthly fee in GDS. Higher fees reduce the room available for the mortgage payment and can lower the maximum price even if the interest rate and income are unchanged.

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

How the Math Works on a $90K Salary

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

• Insured files use GDS 39% → $7,500 × 39% = $2,925
• Uninsured files use GDS 35% → $7,500 × 35% = $2,625
• Monthly property tax = price × 1% ÷ 12
• Monthly heating = $100 (house baseline)
• P&I room = 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 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 loan includes a CMHC premium of 4% on the base loan amount. Property taxes at 1% of the home price and $100 heating are included in GDS, with higher home prices bringing 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
3.0%	5.25%	$418,277	$413,257	$1,960	$2,476	$349	$100	$2,925
3.5%	5.5%	$409,390	$404,477	$2,025	$2,484	$341	$100	$2,925
4%	6%	$392,414	$387,705	$2,046	$2,498	$327	$100	$2,925
4.5%	6.5%	$376,447	$371,929	$2,067	$2,511	$314	$100	$2,925
5%	7%	$361,424	$357,087	$2,087	$2,524	$301	$100	$2,925

How the Contract Rate Shapes Your Approval

Your contract rate controls two factors at once. First, it sets your actual monthly payment. Second, it sets the qualifying rate for the mortgage stress test, which is the greater of 5.25% or the contract rate + 2%. For example, at a 4% contract rate, the qualifying rate is 6%. Lenders then test whether the qualifying payment, plus monthly property taxes and $100 heating, fits within the 39% GDS cap of $2,925 on a $90K salary.

If that total stays at or below $2,925, the approval is confirmed, and the mortgage amount is calculated. For an insured file with a 5% downpayment, the approved mortgage amount includes the default insurance premium at 4% of the base 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 home price annually.

What does this mean for a $90K salary?

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 for an insured 5% down purchase, a borrower earning $90K can typically qualify for a home between about $361K and $418K, with the exact mortgage approval moving as interest rates change.

How would choosing a variable rate affect the approval on my $90K salary?

A mortgage pre-approval on a variable rate is stress-tested off today’s prime rate. If prime rises before you convert to a live approval, your contract rate climbs, and the qualifying rate increases as well, since lenders test at the greater of 5.25% or contract + 2%. Within the same $2,925 GDS cap, that leaves less room. For example, moving from 4% to 4.5% reduces the insured 5% mortgage limit down from about $392,414 to $376,447, a drop of nearly $16K. If rates fall to 3.5%, the ceiling improves to roughly $409,390, with the mortgage approval increasing by about $17K higher than at the 4% interest rate.

Insured with a 10% Down Payment

Before the table, remember that the default insurance premium drops to 3.10% when 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 $2,925 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%	$441,838	$409,981	$1,944	$2,457	$368	$100	$2,925
3.5%	5.5%	$432,523	$401,338	$2,009	$2,465	$360	$100	$2,925
4%	6%	$414,721	$384,820	$2,031	$2,479	$346	$100	$2,925
4.5%	6.5%	$397,967	$369,273	$2,053	$2,493	$332	$100	$2,925
5%	7%	$382,194	$354,638	$2,073	$2,507	$318	$100	$2,925

Reading the Pattern

As the down payment increases, the default premium rate falls, which slightly increases the ceiling at the same rate. However, if you carry other monthly debts, such as car loans or minimum payments on credit cards, 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

For uninsured mortgage loans, the GDS cap is tighter at 35%, which equals $2,625 on a $90K 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%	$448,704	$358,963	$1,702	$2,151	$374	$100	$2,625
3.5%	5.5%	$439,434	$351,547	$1,760	$2,159	$366	$100	$2,625
4%	6%	$421,695	$337,356	$1,781	$2,174	$351	$100	$2,625
4.5%	6.5%	$404,973	$323,978	$1,801	$2,188	$337	$100	$2,625
5%	7%	$389,206	$311,365	$1,820	$2,201	$324	$100	$2,625

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 GDS and TDS limits on uninsured files, which can offset the benefit. Insured mortgages with less than a 20% downpayment can qualify for higher amounts as they 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, the TDS room shrinks and the mortgage you can qualify for drops. Even a $300 to $400 monthly debt can lower the maximum purchase price by tens of thousands. Conversely, some buyers improve their results by choosing a city with lower property taxes or by targeting a smaller, more efficient home that reduces heating costs.

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 $90K Mortgage Approval

Final Thoughts

A $90,000 salary can support homeownership in Canada. Still, the final number is set by debt service ratios, monthly carrying costs, and the mortgage stress test rather than a simple multiple of income. Through our examples, we’ve shown 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 options, model your GDS and TDS under multiple scenarios, and the value of a lower downpayment if you’re still struggling to save 20%. Expert advice turns a complex approval into a confident mortgage strategy 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.

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

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