Calculate Mortgage Payments, Housing Expenses and Rental Income
This calculator is for illustrative purposes only. Users should not rely on this calculator to make any financial decisions. Keep in mind that small differences in payment and savings estimates may occur due to variations in calculation methods used by different lenders. While every effort is made to keep this tool up-to-date, M Factory does not guarantee the accuracy, reliability or completeness of any information or calculations provided by this calculator. M Factory is not liable for loss or damage of any kind arising from the use of this tool.
In Canada, you’re considered a first-time home buyer if you have never owned a home before. In some programs, you may also qualify if you haven’t owned a home in the past 4 years or are starting fresh after a marital breakdown.
The difference between pre-qualification and pre-approval for a mortgage comes down to how in-depth the lender evaluates your finances and how strong the commitment is.
Basic
Comprehensive
No
Yes
No
Yes
Estimated
Verified
Helps set a budget
Makes you a serious buyer
No
Yes, Pre-Approval letter given to show sellers
Which One Should You Get?
Pre-Qualification is useful if you’re just starting to explore your options and want a general idea of your price range.
Pre-Approval is better if you’re serious about buying because it gives you more credibility with sellers and speeds up the mortgage process.
To qualify, you must prove you can afford payments at the greater of:
The Bank of Canada’s qualifying rate (currently 5.25%)
Your contract rate + 2%
This protects you from rate increases and ensures affordability.
Yes. Many buyers purchase with a spouse, family member, or co-signer to boost qualifying income. A co-signer (often a parent) helps with mortgage approval but is also responsible for the loan.
To determine how much you can afford, you’ll need to consider your taxable income, outstanding debts, and monthly expenses.
Step 1: Calculate Housing Costs
For a primary residence, lenders typically allow you to allocate up to 39% of your income toward housing expenses, including:
Step 2: Consider Debt Obligations
Next, calculate 44% of your taxable income, then subtract all monthly debt payments, such as:
The lower amount from Step 1 or Step 2 is what lenders generally use to determine how much of your income can go toward housing costs.
Step 3: Stay Financially Comfortable
While these ratios provide a guideline, it’s essential to ensure you’re comfortable with the debt level. If 39% of your income feels too high, you may want to opt for a lower percentage to avoid becoming “house poor” and still have room in your budget for other expenses and lifestyle choices.
Additionally, you must qualify for your mortgage under the federal government’s mortgage stress test regulations, ensuring you can afford payments even if interest rates rise.
By carefully assessing these factors, you can find a home price that fits your financial situation and lifestyle.
In short—yes, you should get a home inspection.
A home inspection is a professional, visual assessment of a property’s condition. Conducted by a certified home inspector, it evaluates the home’s key components, including:
After the inspection, you’ll receive a detailed written report—usually within 24 hours—outlining any issues, from minor repairs to major structural concerns.
A pre-purchase home inspection helps protect your investment by revealing potential problems that could affect your decision or negotiation strategy. It also gives you peace of mind and allows you to plan for future maintenance, reducing unexpected surprises after you move in.
When purchasing a home, you’ll need to budget for several expenses beyond the purchase price. Here’s a breakdown of key costs to consider:
Being aware of these costs helps ensure a smooth home-buying process without unexpected financial surprises.
Owning a home is a rewarding investment, but it comes with ongoing expenses.
Budgeting for these costs helps ensure financial stability and prevents unexpected financial strain.
Key Monthly Homeownership Costs include:
By understanding these costs and planning ahead, you can enjoy homeownership while staying financially prepared for both expected and unexpected expenses.
Yes! This is often called a construction mortgage or construction-to-permanent mortgage. It’s designed for buyers who are building a home and need financing in stages until the house is complete.
Here’s how it works:
Stage Payments: Instead of receiving the full mortgage upfront, the lender releases funds in stages (called “draws”) as construction milestones are completed.
Interest During Construction: You typically pay interest only on the funds that have been released, not the full mortgage amount.
Conversion to Permanent Mortgage: Once construction is finished, the mortgage converts into a standard mortgage for your long-term term.
Documentation Required: Lenders usually require a detailed construction plan, builder contracts, and proof of permits and insurance.
Tips:
Work with a mortgage broker experienced in construction financing — not all lenders offer this type of mortgage.
Budget for contingencies in case construction costs rise.
Coordinate closely with your builder and lender to ensure draws are released smoothly.
