Lenders use two ratios to determine what you can afford: GDS (Gross Debt Service), which caps your housing costs — mortgage payment, property tax, heat, and half of any condo fees — at roughly 39% of your gross income, and TDS (Total Debt Service), which caps housing costs plus all other debt payments at roughly 44%. The lower of the two figures is what actually determines your maximum mortgage.
On top of that, your mortgage amount is sized using the federal stress test rate, not your actual contract rate — so the number a lender approves is often lower than what your monthly budget alone would suggest.
The most accurate way to see where you land is to run your numbers through our mortgage qualifying calculator, which applies these same ratios and the current stress test rate. From there, we can walk through your specific income situation and debt load together.