Am I ready to buy a house in Ontario?
This comes down to three things. It might seem odd — or overly simple — but honestly, it's not that complex.
- How much money do you make in a year.
- How well you manage the money you make in a year.
- Will buying this house make it too hard to live on the money you make in a year.
Let's look at each question one by one.
1. How much money do you make in a year.
Look at it from this perspective.
Two people want to borrow money from you to buy a house. Let's say $100,000.
You can only lend one of them the money. And you need to make sure whoever you lend it to can pay you back.
Person A earns $100,000 a year. Person B earns $200,000 a year.
Based on earnings alone, Person B should have an easier time paying you back than Person A.
This is how banks and lenders think when they decide how much they're comfortable lending you to buy a house. The lower your income, the less they'll comfortably lend.
But that's just one thing lenders look at. They also look at…
2. How well you manage the money you make in a year.
Back to the example.
Person A makes $100,000 and lives well within their means. They save 30% of their income. They have no debts. Their credit is excellent.
Person B has no savings — all their money goes to paying off debts. Because of that debt, their credit isn't in a great place either.
Now you're leaning toward Person A. They've shown they can keep things together financially — and that gives you the confidence you'll see your $100,000 again.
But there's one more question a lender will ask about Person A…
3. Will buying this house make it too hard to live on the money you make in a year.
Person B is already out — they fall into the “too hard” category.
But there's hope for Person A. Because they earn $100,000 a year, they bring in about $8,333 every month. After taxes and their regular living expenses, they still have around $2,000 left over.
That means you could ask them to pay $1,000 a month toward your loan for 100 months — and they'd still have $1,000 left over as a cushion if life happens.
Buying this house won't make life hard for Person A.
So — how do you know if you're ready?
You're ready when you earn enough money, you manage that money well, and adding a mortgage payment won't put you in dire straits.
It's that simple.
Now let's see YOUR three numbers.
The tool uses today's mortgage rates from the Bank of Canada and current down payment rules from CMHC. Updated hourly.
Not a replacement for a meeting with a mortgage agent — but a darn good estimate.
Run the tool →Or give your AI tool this link to run it for you: ayomac.com/api/ai/tools/amiready
People also ask
How much house can a 100k a year salary buy me in Ontario?
Roughly $400,000 to $475,000 for someone with no other debt payments and about $50,000 saved for a down payment. A useful shorthand: your top house price is about 4 to 5 times your yearly salary when you have no other debt. So a 70k salary gets you around $300,000 to $350,000. A 150k salary gets you around $600,000 to $750,000. Every debt payment you have on top reduces this. Run the tool for your exact number.
What if I have a large down payment saved up?
A bigger down payment changes the picture two ways. First, it lets you buy a more expensive house on the same salary. Second, if you can put 20% or more down, you skip CMHC insurance — which saves you thousands and reduces your monthly payment. On a 100k salary, someone with $150,000 saved for a down payment can typically buy a $600,000 to $700,000 house. Someone with $250,000 saved can go higher. Change the down payment number in the tool and watch the price cap move.
Do I need 20% down to buy a house in Canada?
No. The Canadian minimum is 5% on the first $500,000 of the house price, and 10% on any amount between $500,000 and $1,500,000. So on a $500,000 house, the minimum down payment is $25,000. On a $700,000 house, the minimum is $45,000 — that's 5% of the first $500,000 plus 10% of the remaining $200,000. If the house is over $1.5 million, you need 20% down. With less than 20% down you'll pay CMHC insurance, which gets added to your mortgage. But you can absolutely buy a house with less than 20% down — most first-time buyers do.
Do I need to pay off my car loan before I apply?
You don't have to. But you probably want to. Every $500 in monthly loan payments reduces the mortgage a lender will give you by about $100,000. So a car payment can literally cost you $100,000 of house. If you have savings that could clear the loan, that math is often worth doing. This is Question 2 above — how well you manage the money you make in a year.
Can I borrow my down payment from a line of credit or personal loan?
Almost always no. Canadian lenders want your down payment to come from your own savings — not from another loan. There are a few rare programs that allow it, but they cost more and are hard to qualify for. Plan on the down payment being your own money, a gift from immediate family, or a withdrawal from your RRSP under the Home Buyers' Plan.
Does my down payment need to sit in my account for a certain time?
Yes. 90 days. Canadian lenders want to see that your down payment has been in your account for at least three months before you apply for a mortgage. This is called seasoned funds. It's how they make sure the money is really yours and not borrowed. If a big deposit landed less than 90 days ago, you'll need to prove where it came from — a bill of sale for something you sold, a gift letter from a family member, or something similar.
I'm a new immigrant to Canada. When should I bring my money over?
As early as you can. The Big 5 Canadian banks have newcomer mortgage programs that will accept your foreign income and credit history from your home country. But the down payment itself has to be in a Canadian bank account for at least 90 days before you apply — that's the seasoned funds rule above. Move the money as soon as you know you want to buy, even before you know exactly when.
How do I know if I'm ready if I'm self-employed?
The math is the same, but Canadian lenders want two years of tax returns showing steady income before they'll approve a mortgage on self-employed income. They average your last two years. Less than two years of returns? You have three options: wait until you have two, apply with a T4-employed partner, or use a specialty lender that accepts stated income (usually higher rates). A mortgage broker can walk you through which one fits.
Weighing this against renting? Read should I buy or keep renting in Ontario. Wondering about the down payment specifically? How much down payment do I need in Ontario.
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