What's the debt-to-income ratio limit in Canada?
Quick Answer
Short answer: Total debt service under 42%, housing costs under 35% of gross income.
Detailed Explanation
Federal stress-test rules cap your total monthly obligations (mortgage, property tax, heat, other debt) at 42% of gross household income. Housing costs alone shouldn't exceed 35%.
Lenders calculate payments at the higher of your contract rate plus 2% or the Bank of Canada benchmark (currently 5.25%).
- Self-employed income often gets discounted 10–25%
- Child support counts as debt, child benefits as income
- Some lenders allow slight overages with compensating factors
Disclaimer: This page is for general information only and does not constitute legal, financial, or real estate advice. Always verify details with a licensed Alberta REALTOR®, mortgage professional, or lawyer before making decisions. Buy in Edmonton assumes no liability for actions taken based on this content.
Tim Grover, RE/MAX Excellence • 780-288-5144 • 5607 199 Street NW, Edmonton, AB
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