How Much Do You Need to Make to Qualify for a $400K Mortgage?
“What income do I need for a $400,000 mortgage?” is asked as though it has one answer, and the honest reply is that it has a range — because two people earning identical salaries can qualify for very different amounts. What decides it is not just what you earn but what you already owe, how much you have saved, and the rate you are tested at.
The short answer
Under CMHC guidelines a household needs roughly $95,000–$115,000 of gross annual income to carry a $400,000 mortgage, assuming little other debt. The spread is that wide because the qualifying rate is the greater of contract plus 2% or 5.25%, and because property tax, heat and any condo fee all count inside the 39% gross debt service cap. Existing debt moves the number more than anything else.
Key takeaways
- Two ratios govern: gross debt service near 39% of income for housing, total debt service near 44% for housing plus all other debt.
- The ratios are calculated at the stress-test rate, not your contract rate.
- Housing costs in the ratio include mortgage payment, property tax, heating, and half of any condo fee — not the mortgage alone.
- A $400 monthly car payment can reduce the mortgage you qualify for by roughly $60,000–$70,000.
- A $400,000 mortgage is not a $400,000 home: with 5% down that is a home around $420,000, and the insurance premium is added to the loan.
Who this guide is for
Edmonton buyers working out whether their household income reaches a specific mortgage size, and anyone confused about why an online affordability calculator and a real pre-approval disagree.
The two ratios that decide it
Gross debt service (GDS) asks what share of your gross income goes to housing: mortgage principal and interest, property tax, heating costs, and half of any condo fee. CMHC guidelines cap this near 39%.
Total debt service (TDS) adds every other monthly obligation — car loans, student loans, credit card minimums, lines of credit, support payments — and is capped near 44%.
You must clear both. Whichever binds first sets your maximum, and for most first-time buyers with any consumer debt at all, it is TDS.
Why the required income is a range, not a number
- The qualifying rate. Tested at roughly 6.3% rather than a 4.3% contract rate, the same mortgage demands a visibly higher income.
- Property tax. A real input to GDS, and it varies by property and assessed value.
- Condo fees. Half the fee counts. A $450 monthly fee consumes $225 of GDS room every month before the mortgage is considered.
- Amortization. A longer amortization lowers the qualifying payment and therefore the income needed — at the cost of more total interest.
- Existing debt. The single largest swing factor, and the only one you can act on quickly.
Why two identical salaries qualify differently
Take two applicants each earning $100,000. The first has no consumer debt. The second has a $450 car payment and $150 in credit card minimums. That $600 a month consumes roughly $7,200 a year of TDS room — and because the ratios work on the qualifying payment, it translates into tens of thousands of dollars less mortgage.
This is why “what income do I need” is the wrong question on its own. The useful version is: what income do I need given what I already owe.
If you are close and want more room, clearing the smallest monthly obligations is usually more effective than a raise you cannot control or a rate you cannot negotiate much further. Lenders count the monthly payment, not the balance — so a nearly-paid-off loan with a high payment is still hurting you.
A $400,000 mortgage is not a $400,000 home
With 5% down, a $400,000 mortgage corresponds to a purchase price around $420,000. Below 20% down the mortgage default insurance premium — 4.00% at five per cent down, 3.10% at ten — is added to the mortgage, so the amount you actually owe is a little higher again.
And you will need closing costs on top of the down payment. Alberta helps here: no provincial land transfer tax, with Land Titles registration at $50 plus $5 per $5,000 of value plus legal fees and adjustments.
Ryan McCann
Ryan is an Edmonton-based REALTOR® with MaxWell Polaris and the person behind Padster. He's helped over 2,200 clients in the Edmonton area buy and sell their home.
Contact Ryan today at 780-964-8445 to talk through your next step.
Last reviewed 22 August 2026. General information for Edmonton-area buyers — not individualized financial, mortgage, legal or tax advice. Mortgage rules, government programs and market figures change; confirm current details with a licensed mortgage professional, an Alberta real-estate lawyer, or the relevant government source before making a decision. Padster is not a brokerage.
Sources
- CMHC — Calculating GDS / TDS
- Office of the Superintendent of Financial Institutions — Minimum qualifying rate for uninsured mortgages
- Financial Consumer Agency of Canada — How much you need for a down payment
- Government of Alberta — Land Titles
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What income do I need for a $400,000 mortgage in Canada?
Roughly $95,000 to $115,000 of gross household income with little other debt, under CMHC's debt service guidelines. The range is wide because property tax, heating and condo fees count inside the ratios and everything is tested at the stress-test rate.
Does a bigger down payment lower the income I need?
Yes. A larger down payment means a smaller mortgage and a lower qualifying payment, so the same income clears the ratios more easily.
Do student loans and car payments affect a mortgage approval?
Significantly. They count toward your total debt service ratio, capped near 44%. A $450 car payment can reduce the mortgage you qualify for by roughly $60,000 to $70,000.
What is included in the gross debt service ratio?
Mortgage principal and interest, property tax, heating costs, and half of any condo fee — not the mortgage payment alone.
Is a $400,000 mortgage the same as a $400,000 house?
No. With five per cent down, a $400,000 mortgage corresponds to a home around $420,000, and the mortgage default insurance premium is added to the loan on top.
Does a longer amortization help me qualify?
It lowers the qualifying payment and therefore the income needed, at the cost of more total interest paid over the life of the mortgage.
