Thinking about buying a home in Canada? You’ll need to make more than you might think. With higher interest rates and new stress test rules, the income needed to qualify for a mortgage in Canada has shifted dramatically.
Recent updates from Nesto.ca break down exactly what you need to know, from how much you need to earn to afford an average home, to how these numbers vary across provinces and cities.
Key Takeaways:
- Canadians typically need an income of 3.5 to 4 times their mortgage amount with a 20% downpayment.
- Newfoundland has the lowest income requirements, while Vancouver has the highest.
- Whether you choose a fixed or variable rate mortgage impacts the income you need.
- The minimum qualifying rate remains the higher of 5.25% or your contract rate +2%, making stress testing tough for buyers.
What You Need to Qualify for a Mortgage in Canada
To get approved for a mortgage, Canadians must pass a stress test to prove they can handle future rate increases. Even if you’re switching lenders or renewing, these rules apply unless you have an insured mortgage.
The stress test means you need to show you can afford your payments at a higher interest rate—not just today’s rates.
Mortgage default insurance is also required if your downpayment is less than 20%, which affects your total costs but can lower your qualifying rates.
How Much Income You Need by Province
Home prices and income requirements differ greatly depending on where you live:
| Province | Income Needed | Average Home Price |
|---|---|---|
| Canada | $131,842 | $712,200 |
| Ontario | $157,622 | $845,200 |
| British Columbia | $180,711 | $970,300 |
| Alberta | $102,305 | $524,000 |
| Quebec | $101,243 | $520,800 |
| Nova Scotia | $80,438 | $421,900 |
| Newfoundland | $58,636 | $307,300 |
Data sourced from Nesto.ca and CREA reports (2025).
How Much Income You Need by Major City
Living in a big city? Here’s what you’re looking at:
| City | Income Needed | Average Home Price |
|---|---|---|
| Vancouver | $239,780 | $1,190,900 |
| Toronto | $215,488 | $1,068,500 |
| Victoria | $164,169 | $891,000 |
| Calgary | $108,555 | $583,400 |
| Edmonton | $84,281 | $431,300 |
| Halifax | $105,224 | $557,000 |
Notably, in Toronto, you now need a household income over $215,000 to afford an average home, even with a 20% downpayment.
How Rising Interest Rates and Stress Tests Are Changing the Game
Even though home prices have cooled slightly since their pandemic peaks, higher interest rates mean affordability hasn’t improved much. Canadians still face the tightest affordability levels seen since the early 1990s.
Fixed rates and variable rates can both affect how much income you’ll need to qualify:
- Fixed rates offer stability but often require slightly higher qualifying incomes.
- Variable rates fluctuate but might help you qualify at a lower income today—though they carry more risk.
Higher loan-to-value ratios (LTVs) and debt service ratios (GDS and TDS) are also closely scrutinized, meaning solid financial health is more important than ever.
Final Thoughts
Navigating the Canadian housing market in 2025 isn’t easy. If you’re buying your first home—or even considering upgrading—knowing your required income can make a huge difference.
With tougher qualifying standards and rising home prices in major cities, partnering with an expert mortgage advisor like those at Nesto.ca can help you find the best rates and make a confident decision.
Canada Housing Market 
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