Methodology and sources
You should be able to see what is hiding behind every answer.
What these tools cover
Owner-occupied homes with one or two residences. Fixed mortgage rates and monthly payments. Traditional down payments from savings or gifts.
Cash and closing-cost estimates cover Ontario resale purchases. Lender approval, rental income and unusual ownership arrangements need individual review.
Mortgage payments and income
Monthly rate = (1 + annual rate ÷ 2)^(1 ÷ 6) − 1.
Payment = mortgage × monthly rate ÷ [1 − (1 + monthly rate)^(−months)].
At zero interest, divide the mortgage by the number of payments.
The qualifying rate is the higher of 5.25% or your rate plus two percentage points.
Monthly housing costs include the qualifying payment, property tax, heating and half of condo fees.
Gross Debt Service (GDS) means housing costs compared with income. Total Debt Service (TDS) includes other debt payments.
Required annual income is the larger of these two amounts:
- Monthly housing costs ÷ 0.39 × 12.
- (Monthly housing costs + monthly debts) ÷ 0.44 × 12.
These are CMHC planning limits. Uninsured lenders can use different limits. This purchase tool does not assess renewal exceptions.
Down payment and insurance
Below $1.5 million: 5% of the first $500,000, then 10% of the balance. At $1.5 million or higher: 20%.
Below 20% down, we add the standard CMHC premium to the mortgage.
| Down payment | Up to 25 years | Eligible 30 years |
|---|---|---|
| 5% to below 10% | 4.00% | 4.20% |
| 10% to below 15% | 3.10% | 3.30% |
| 15% to below 20% | 2.80% | 3.00% |
Apply the percentage to the mortgage before insurance. At 20% down, we assume no borrower-paid default insurance.
Insured 30-year loans require eligible first-time buyer or new-build status. This definition differs from land transfer tax refund eligibility.
Ontario cash estimates add 8% tax on the premium. The premium is financed; this tax is paid upfront.
Land transfer tax and cash
Each tax rate applies only to the portion within that bracket. Ontario and Toronto taxes are added together for Toronto purchases.
Full eligible refunds are capped at $4,000 provincially and $4,475 municipally. Partial refunds use the qualifying ownership share.
Toronto's April 1, 2026 upper brackets are included. Cash estimates add its $102.56 administration fee plus 13% HST.
Cash = down payment + net transfer taxes + premium tax + entered fees + Toronto administration fee.
When only some buyers qualify
With equal ownership, divide qualifying buyers by all buyers.
Two qualifying buyers out of five gives a 40% qualifying ownership share.
We multiply the full-home refund by that share, after applying each refund cap.
Where full refunds reach their caps, 40% means $1,600 provincially and $1,790 municipally.
For unequal ownership, enter the combined qualifying share instead.
Spouse rules can change eligibility and the ownership share allowed for a refund.
Prior ownership during the relationship can disqualify both spouses.
A spouse’s share may count if their previous home was sold before the relationship.
Citizenship, residency and occupancy conditions also apply. Confirm unusual arrangements with your lawyer.
Use the custom share only after confirming these rules.
Ontario: partial refund examples and eligibility · Toronto Municipal Code: section 760-60(D)
Affordability
We search for the highest price meeting the income and down-payment tests. Property tax follows your entered percentage.
Without insured 30-year eligibility, a 30-year loan requires at least 20% down. Closing costs need separate savings.
Rent versus buy
Both households start with equal savings and the same monthly spending budget. Whoever spends less invests the difference each month.
The renter invests the unused down payment and buying costs. The owner starts with zero investments.
Owner wealth is sale proceeds, minus selling costs and remaining mortgage, plus investments. Renter wealth is the investment balance.
Mortgage insurance is financed where needed. Enter any applicable premium tax within buying costs.
Rates, rent, property taxes and maintenance remain constant. The mortgage payment ends when the loan is paid off.
Home growth and investment returns compound. Returns are after investment fees and taxes.
The model excludes utilities, condo fees, home insurance, moving costs and mortgage-breaking penalties. It assumes no tax on the home sale.
Try different growth and return assumptions. Lifestyle and flexibility cannot be reduced to dollars.
Calculation checks
Automated checks cover payment formulas, tax brackets, insurance thresholds and partial buyer rebates.
These checks do not replace individual advice or lender approval.
Buying costs in the rent-versus-buy comparison include financed default insurance premiums.
Official sources and review
Checked September 2, 2026. No claim of ongoing automatic updates.
- OSFI: mortgage stress test
- CMHC: debt limits and condo fees
- CMHC: down payments and insurance premiums
- CMHC: 30-year eligibility and premiums
- Ontario: land transfer tax rates
- Ontario: first-time buyer refund
- Toronto: rates and administration fee
- Toronto: first-time buyer rebate
- Ontario: insurance premium tax
Source note: FCAC’s down-payment page contains an older insurance-limit statement. We use CMHC’s current purchase and Home Start limits.