Verified October 19, 2026 · Rates checked October 19, 2026 · Local Toronto Editorial
Short answer: to buy an $850,000 home in the GTA with the minimum down payment of $60,000, a household with no other debts needs a gross income of about $188,000 a year. With 20 per cent down ($170,000), it drops to about $159,000. Those figures assume today’s best 5-year fixed rate of 4.34 per cent, the federal stress test, a 25-year amortization, Mississauga-level property tax and $100 a month for heat. Your own number moves with your rate, your city, your debts and your amortization, and the calculator below lets you change each one.
$850,000 is close to the middle of the GTA market. In September 2026 the median sale across the TRREB area was $860,000, Brampton’s average was $854,322 and the average 905 semi-detached house sold for $851,266.
The rules that decide how much income you need
Lenders do not ask what you can afford. They test your income against fixed ratios at a rate higher than the one you will pay.
- The stress test rate. For both insured and uninsured mortgages, you qualify at the greater of your contract rate plus 2 percentage points or 5.25 per cent. At a 4.34 per cent rate, you are tested at 6.34 per cent. OSFI sets this for uninsured mortgages at federally regulated lenders, and CMHC applies the same rule to insured ones.
- Gross debt service (GDS), limit 39 per cent. The mortgage payment at the stress test rate, plus property tax, heat and half of any condo fee, divided by gross income.
- Total debt service (TDS), limit 44 per cent. All of the above plus car loans, student loans, lines of credit and card payments.
- Minimum down payment. 5 per cent of the first $500,000 and 10 per cent of the rest, for homes under $1.5 million. On $850,000 that is $25,000 + $35,000 = $60,000.
- Mortgage default insurance. Required with less than 20 per cent down. The premium is added to the mortgage, so you have to qualify for a larger loan.
The 39 and 44 per cent limits are CMHC’s. Lenders on uninsured mortgages use their own limits, which are often similar, so treat the 20 per cent down figures as a guide and confirm with your lender. Our mortgage stress test guide works the question the other way round: how much you can borrow on a given income.
Income needed for an $850,000 home, by down payment
| Down payment | CMHC premium | Mortgage | Payment you make | Income needed |
|---|---|---|---|---|
| $60,000 (7.1%, minimum) | $31,600 (4.00%) | $821,600 | $4,475 | $188,095 |
| $85,000 (10%) | $23,715 (3.10%) | $788,715 | $4,295 | $181,415 |
| $127,500 (15%) | $20,230 (2.80%) | $742,730 | $4,045 | $172,074 |
| $170,000 (20%) | None | $680,000 | $3,703 | $159,332 |
Going from the minimum down payment to 20 per cent lowers the income needed by about $28,800. Part of that comes from the smaller loan, and part from avoiding the $31,600 insurance premium. Payments are monthly, at the 4.34 per cent rate you would actually pay.
With a 30-year amortization
Since December 15, 2024, all first-time buyers and all buyers of new builds can take a 30-year amortization on an insured mortgage. CMHC charges 0.20 per cent more premium for it. Many lenders also offer 30 years on uninsured mortgages with 20 per cent down.
| Down payment | Premium | Mortgage | Payment you make | Income needed |
|---|---|---|---|---|
| $60,000 (minimum) | $33,180 (4.20%) | $823,180 | $4,074 | $177,290 |
| $85,000 (10%) | $25,245 (3.30%) | $790,245 | $3,911 | $171,045 |
| $127,500 (15%) | $21,675 (3.00%) | $744,175 | $3,683 | $162,310 |
| $170,000 (20%) | None | $680,000 | $3,366 | $150,141 |
Five extra years cut the income needed by roughly $9,000 to $11,000. The trade-off is more interest over the life of the loan and slower equity in the early years.
The arithmetic for the minimum down payment
Here is how the $188,095 figure is built, so you can check it or redo it with your own numbers.
- Loan before insurance: $850,000 − $60,000 = $790,000. Loan-to-value is 92.9 per cent, which falls in CMHC’s 4.00 per cent premium band.
- Premium: $790,000 × 4.00% = $31,600. Mortgage = $821,600.
- Stress test payment: $821,600 over 25 years at 6.34 per cent, compounded semi-annually as Canadian mortgages are, is $5,424 a month.
- Housing costs for GDS: $5,424 + property tax $589 ($7,071 ÷ 12) + heat $100 = $6,113 a month.
- Income: $6,113 ÷ 0.39 = $15,675 a month, or $188,095 a year.
The property tax example uses an MPAC assessment of $650,000 at Mississauga’s 2026 rate of 1.087901 per cent. Ontario assessments are still based on January 1, 2016 values, so an $850,000 home is usually assessed for less than its price. Ask for the actual tax bill on any home you are looking at. The $100 heat figure is our estimate; CMHC tells lenders to use the actual heating cost where the borrower has it.
How your city changes the income you need
Property tax is part of the GDS ratio, so the same price needs a different income in different cities. The table uses the same $650,000 example assessment and each city’s 2026 residential rate from our GTA property tax rates page.
| City | 2026 rate | Yearly tax | Income, minimum down | Income, 20% down |
|---|---|---|---|---|
| Markham | 0.722889% | $4,699 | $182,013 | $153,250 |
| Toronto | 0.767311% | $4,988 | $182,754 | $153,991 |
| Mississauga | 1.087901% | $7,071 | $188,095 | $159,332 |
| Brampton | 1.253381% | $8,147 | $190,854 | $162,091 |
| Oshawa | 1.575342% | $10,240 | $196,220 | $167,458 |
The gap between the lowest and highest rate cities is about $14,000 of income on the same price. Toronto’s low rate is offset at purchase by its municipal land transfer tax, covered below.
Debts, condo fees and the rate you choose
Other debts
With no other debts, the 39 per cent GDS limit is the one that binds. Once your monthly debt payments pass about $784 (minimum down) or $664 (20 per cent down), the 44 per cent TDS limit takes over and every extra dollar of debt raises the income needed.
| Other debt payments | Minimum down | 20% down |
|---|---|---|
| None | $188,095 | $159,332 |
| $800 a month | $188,539 | $163,045 |
| $1,200 a month | $199,448 | $173,954 |
Unsecured lines of credit and cards count at no less than 3 per cent of the balance each month under CMHC rules, even if you pay them off. A $10,000 card balance counts as $300 a month.
Condo fees
Half of the condo fee goes into both ratios. A $600 monthly fee on an $850,000 condo townhouse raises the income needed at the minimum down payment from $188,095 to $197,326.
The rate you lock in
Because the test rate is your rate plus two points, a cheaper rate lowers the income you need.
| 5-year fixed rate | Tested at | Income, minimum down | Income, 20% down |
|---|---|---|---|
| 4.34% (lowest listed) | 6.34% | $188,095 | $159,332 |
| 4.69% (lowest big bank) | 6.69% | $193,461 | $163,774 |
| 5.19% (BMO listed) | 7.19% | $201,248 | $170,219 |
The lowest listed rates are often for insured mortgages; uninsured rates can be a little higher. The Bank of Canada held its policy rate at 2.25 per cent on September 2 and announces its next decision on October 28, 2026. A change there moves variable rates directly and can shift fixed rates through bond yields.
Cash you need on top of the income
Qualifying on income is only half of it. You also need cash on closing day.
| Item | Outside Toronto | In Toronto |
|---|---|---|
| Down payment | $60,000 | $60,000 |
| 8% Ontario sales tax on the CMHC premium | $2,528 | $2,528 |
| Ontario land transfer tax ($13,475 less $4,000 refund) | $9,475 | $9,475 |
| Toronto land transfer tax ($13,475 less $4,475 rebate) | None | $9,000 |
| Subtotal before legal fees, title insurance, inspection and adjustments | $72,003 | $81,003 |
The premium itself goes on the mortgage, but the sales tax on it is paid in cash. Buyers who are not first-time buyers pay the full $13,475 provincial tax (and $13,475 more in Toronto). Legal fees, title insurance and an inspection add more; our breakdown of the cash needed to close on an $800,000 home lists every line with estimates, and our land transfer tax examples show the brackets.
Calculator: income needed for your home
Change any field. The result uses the same method as the tables: CMHC premium bands, the stress test rate, semi-annual compounding and the 39 and 44 per cent limits.
Once you have a number, the mortgage payment calculator shows the payment schedule, and our first-time buyer guide covers the FHSA, RRSP withdrawals and rebates that help with the down payment.
What $850,000 buys right now
In September 2026, TRREB figures put $850,000 close to the GTA median sale ($860,000) and the Peel median ($855,000). It was near the average Brampton home ($854,322), above the average 905 townhouse ($789,299) and below the average Mississauga home ($929,600). Our September market report has the full city and home-type tables. If you are ready to look at homes in this range, start on our buy a home page. If you already own and want to know what your home would bring toward a move, request a free home evaluation.
Questions buyers ask
What salary do you need to buy an $850,000 house in Ontario?
About $188,000 of household income with the minimum $60,000 down, or about $159,000 with 20 per cent down, assuming no other debts, a 4.34 per cent 5-year fixed rate, a 25-year amortization, $7,071 a year in property tax and $100 a month for heat. Two incomes on the application are added together.
What is the minimum down payment on an $850,000 home?
$60,000: 5 per cent of the first $500,000 ($25,000) plus 10 per cent of the remaining $350,000 ($35,000). With less than 20 per cent down you also need mortgage default insurance.
Does a 30-year amortization lower the income needed?
Yes. With the minimum down payment it drops from about $188,000 to about $177,000. Insured 30-year mortgages are open to first-time buyers and buyers of new builds, with a 0.20 per cent premium surcharge.
Do I qualify at my real rate or a higher one?
A higher one. You qualify at the greater of your rate plus 2 points or 5.25 per cent. At 4.34 per cent you are tested at 6.34 per cent, but you pay 4.34 per cent.
Does the city I buy in change the income I need?
Yes, through property tax. On the same price and a $650,000 assessment, the income needed with minimum down ranges from about $182,000 in Markham to about $196,000 in Oshawa.
Can rental income from a basement unit count?
Some lenders count all or part of the rent from a legal second unit. Policies vary by lender, and in cities like Brampton the unit must be registered first.
Sources and method
- OSFI, Minimum qualifying rate for uninsured mortgages (modified January 29, 2026): contract rate plus 2% or 5.25%, whichever is greater.
- CMHC, Calculating GDS and TDS: 39% and 44% limits, qualifying rate, heat, 50% of condo fees, 3% of revolving balances.
- CMHC, Mortgage loan insurance and premiums: premium bands, minimum down payment, $1.5 million cap.
- Department of Finance Canada, mortgage reforms: 30-year amortization for first-time buyers and new builds, from December 15, 2024.
- Finmo, CMHC 30-year premium surcharge: 0.20% added to the premium rate.
- Ontario, Retail sales tax on insurance (8%) and Ratehub.ca, PST on CMHC insurance (paid in cash at closing).
- Ontario, Land transfer tax refunds for first-time homebuyers: maximum $4,000.
- Ratehub.ca, best 5-year fixed rates, October 19, 2026.
- Bank of Canada, September 2, 2026 decision and 2026 announcement schedule.
- Prices: TRREB Market Watch, September 2026, via our September market report. Property tax rates: 2026 municipal by-laws, via our property tax rates page.
Income figures are Local Toronto calculations: monthly payment with semi-annual compounding at the stress test rate, plus property tax, heat and half of condo fees, divided by 39% (GDS), or with other debts divided by 44% (TDS), whichever gives the higher income. The $650,000 assessment and the $100 monthly heat cost are examples, not published averages. Rates change daily.
Image: coins, calculator and charts, Local Toronto media library. General illustration, not a specific property.
This is general information, not mortgage, tax or legal advice. A lender or mortgage broker will confirm what you qualify for.
Local Toronto, HomeLife Landmark Realty Inc., Brokerage.