How Much Mortgage Can I Afford in Alberta?
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·Reviewed by a mortgage professional
Short answer
As a planning rule of thumb, most Alberta lenders want your total housing costs under about 32% of your gross monthly income and all debt payments under about 40%. On a $100,000 household income that is roughly $2,650/month for housing — but your actual number depends on rates, debts, down payment, and the stress test.
The plain-English version
Affordability is not one number — it is a range that depends on your income, your existing debts, your down payment, and the interest rate you qualify at. Lenders use two ratios: Gross Debt Service (GDS), which compares housing costs to income, and Total Debt Service (TDS), which adds your other monthly debt payments.
They also apply the federal stress test, which qualifies you at the higher of your contract rate plus 2% or 5.25%. That means you have to show you could handle a payment at a rate higher than the one you actually get — so the mortgage you qualify for is usually smaller than a basic payment calculator suggests.
Alberta-specific considerations
- Alberta has no provincial land transfer tax, which lowers your closing costs compared to provinces like Ontario or BC.
- Property tax and heating costs vary a lot between Calgary, Edmonton, and smaller communities — and both feed into your GDS ratio.
- Condo fees in Alberta can be significant and count toward your housing costs, which reduces the mortgage you qualify for.
Example scenario
A couple earning $110,000 combined with no car loans and a 10% down payment might plan around a $480,000–$520,000 purchase. Add a $450/month car payment and that range can drop by $60,000–$80,000, because the payment eats into their TDS room.
Common mistakes to avoid
- Budgeting off the rate you see advertised instead of the higher stress-test rate.
- Forgetting property tax, heating, and condo fees — lenders include them, so should you.
- Maxing out the approval amount and leaving no room for closing costs or emergencies.
- Applying for new credit (a car, a card) right before or during your mortgage application.