There is no single income number that unlocks a mortgage in Canada. Lenders work backwards from two debt-service ratios, then test the result against a qualifying rate that is deliberately higher than the rate you will actually pay. The two ratios that decide everything GDS (Gross Debt Service) — your housing costs divided by gross income. Housing costs mean the mortgage payment at the qualifying rate, property tax, heat, and 50% of condo fees. Most lenders cap GDS at 39%. TDS (Total Debt Service) — housing costs plus every other monthly obligation: car loans, credit card minimums (usually 3% of the balance), lines of credit, student loans and support payments. Most lenders cap TDS at 44%. Whichever ratio binds first is the one that sets your maximum. The 2026 stress test Federally regulated lenders qualify you at the greater of 5.25% or your contract rate plus 2%. On a 4.29% contract rate, you are underwritten at 6.29%. That single rule is why the income needed is higher than a simple payment calculation suggests. The test still applies to purchases, refinances and any increase in your loan amount. It does not apply when you renew with your current lender, or on a straight switch to a new lender where the balance and amortization stay the same. Rough income required in 2026 Assuming a 25-year amortization, no other debts, and typical Ontario property taxes and heat: Mortgage amount Approximate household income needed $400,000 $95,000 – $105,000 $500,000 $115,000 – $128,000 $750,000 $165,000 – $185,000 $1,000,000 $215,000 – $240,000 These are planning figures, not approvals. Car payments, child support and credit card balances all cut into the same TDS room and can reduce your maximum by six figures. What counts as income Salaried, full-time — the cleanest file: letter of employment plus a recent pay stub. Hourly or part-time — usually a two-year average, so job changes matter. Bonus and overtime — typically averaged over two years and only if the pattern is consistent. Self-employed — normally a two-year average of line 15000, with add-backs possible for incorporated owners. Rental income — lenders use either an offset (a percentage of rent applied against the property's costs) or an add-back; the treatment varies widely and changes what you qualify for. Child benefits and support — often usable with documentation, depending on the age of the children and the lender. How to raise the number lenders will lend you Clear small balances. A $12,000 car loan at $400 a month can cost roughly $70,000 of mortgage room. Watch card utilization. Lenders use a percentage of the balance, not the payment you actually make. Add a longer amortization. With 20%+ down you can go to 30 years, which lowers the qualifying payment. Compare lenders. Credit unions are provincially regulated and set their own qualifying policies, which can be more generous on rental or business income. Run your own numbers with our affordability calculator, then have a broker confirm what specific lenders will accept. Ready to Get Started? Contact us today for personalized mortgage advice and competitive rates. Get Pre-Approved Call (416) 822-7357 Frequently Asked Questions Is the income needed before or after tax? Lenders use gross income — your income before tax and deductions. Self-employed borrowers are the exception: lenders use net business income from line 15000 of your T1, which is already after business expenses. Do both spouses' incomes count? Yes. When both apply, both incomes and both sets of debts are used in the GDS and TDS calculations, and both credit profiles are reviewed. Can I use a co-signer to qualify? Yes. A co-signer's income and debts are added to the application, which usually improves the ratios. The co-signer is fully liable for the mortgage and it appears on their credit report. How much income do I need for a $1 million home in Toronto? With 20% down, that is an $800,000 mortgage — roughly $180,000 to $200,000 of household income with no other debt, based on 2026 stress-test rules and typical Toronto property taxes.
