How Much House Can I Afford on $120,000 a Year? About $584,126
Lenders qualify you at 6.30% (the greater of your rate + 2% or 5.25%), not at your actual rate.
Updated for the 2026 tax year · Rates checked 14 October 2026
| Home price you can afford | $584,126 |
|---|---|
| Mortgage amount | $504,126 |
| Deposit | $80,000 |
| Monthly mortgage payment | $2,734 |
| Property tax & insurance (monthly) | $584 |
| Total monthly housing cost | $3,319 |
- Lenders qualify you at 6.30% (the greater of your rate + 2% or 5.25%), not at your actual rate.
- Your deposit is 14% of the price; under 20% usually means mortgage insurance.
- At 4.3% the monthly payment would be about $3,319 (33% of gross income).
Your result, explained
Based on your income, debts and deposit, lenders would likely approve a home of up to about $584,126, with a $504,126 mortgage costing around $3,319 a month.
That is the maximum a lender allows, not necessarily what is comfortable. Leave room for savings, repairs and rate rises: many buyers aim 10–20% below the maximum. Paying off a car loan or credit card first is often the fastest way to raise your budget, because every monthly debt payment reduces what you can borrow.
Compare nearby amounts
| Amount | Home price you can afford |
|---|---|
| $110,000 | $541,236 |
| $115,000 | $562,681 |
| $120,000 | $584,126 |
| $125,000 | $605,572 |
| $130,000 | $627,017 |
GDS, TDS and the stress test
Canadian lenders cap your gross debt service (housing costs) at 39% of income and total debt service at 44%. They calculate it at a stress-test rate: the greater of your contract rate plus 2% or 5.25%. That is why approval amounts are lower than your actual payment suggests.