Most first-time buyers start with the listing price. Lenders start with your income, your debts and the full monthly cost of the unit, including condo fees. This page walks through three scenarios at $425,000 so you can see how those pieces fit together before you talk to a lender.
The short version: with the assumptions below and no other debts, a household income of roughly $85,000 to $96,000 is the range lenders would look for, depending on your down payment.
The assumptions behind the numbers
Assumptions (September 27, 2026)
- Purchase price: $425,000, resale condo on the Island of Montreal
- Contract rate: about 4.34%, 5-year fixed, insured (rates change daily)
- Qualifying rate (stress test): about 6.34%
- Municipal and school taxes: $3,000 per year ($250 per month)
- Condo fees: $350 per month
- Heating: $100 per month
- No car loan, student loan or credit card balances
- 5% and 10% down: 30-year insured amortization, CMHC premium including the 0.20% first-time buyer surcharge
- 20% down: 25-year amortization, no insurance premium
- Minimum income uses a GDS limit of 39%
Change any one of these and the result moves. Treat them as a starting point, not a quote.
Three scenarios at $425,000
| 5% down | 10% down | 20% down | |
|---|---|---|---|
| Cash down payment | $21,250 | $42,500 | $85,000 |
| Mortgage (incl. CMHC premium) | $420,708 | $395,122 | $340,000 |
| PST on premium (cash at closing) | about $1,526 | about $1,136 | $0 |
| Monthly mortgage payment | about $2,082 | about $1,956 | about $1,852 |
| Total monthly housing (payment, taxes, fees) | about $2,682 | about $2,556 | about $2,452 |
| Minimum household income (GDS) | about $95,900 | about $91,100 | about $85,200 |
These figures do not include closing costs. Budget separately for the welcome tax (about $4,485.50 at this price in Montreal), the notary, the inspection, adjustments and moving. The PST on the insurance premium is also paid in cash at closing and cannot be added to the loan.
The stress test, in plain terms
You do not qualify at the rate you will actually pay. For a fixed-rate mortgage, lenders test you at the higher of your contract rate plus 2% or 5.25%. At about 4.34%, that means qualifying at about 6.34%.
This is why the income figures above are higher than the actual payment alone would suggest. The test checks that you could still carry the mortgage if rates rose at renewal.
GDS and TDS: the two ratios that decide your approval
- GDS (gross debt service): housing costs divided by gross monthly income. Housing costs are the stress-tested mortgage payment, property taxes, heating and 50% of condo fees. Typical limit: 39%.
- TDS (total debt service): the same housing costs plus every other monthly debt payment. Typical limit: 44%.
You need to pass both. Lenders use the lower amount you qualify for.
Why condo fees count
Condo fees cover part of what a house owner pays directly: building insurance, common area maintenance, the contingency fund. Lenders count half of them as housing cost. At $350 a month, $175 goes into your GDS. A unit with $550 in fees adds $100 more per month to that calculation than one at $350, which raises the income you need.
How a car loan or student loan changes the picture
With no other debts, GDS is usually the limit. Add a monthly debt payment and TDS can take over. Using the 10% down scenario above:
- $300 per month in other debts: TDS still passes at about $91,100 income
- $600 per month: required income rises to about $97,100
- $900 per month: required income rises to about $105,300
Same condo, same down payment. The only difference is a car payment or a student loan. Paying down a balance before you apply can matter more than a few thousand dollars of extra down payment.
Pre-approval is not your budget
A pre-approval tells you the most a lender will lend. It does not account for daycare, travel, retirement savings, or a special assessment from the syndicate two years in. Set your own comfortable monthly number first, then shop below the pre-approval if needed.
Where the down payment can come from
- FHSA (first home savings account): up to $8,000 per year in contribution room, $40,000 lifetime. Contributions are generally deductible and qualifying withdrawals for a first home are tax-free.
- HBP (Home Buyers' Plan): you may withdraw up to $60,000 from your RRSPs toward a qualifying home, then repay it over time.
Rules and eligibility apply to both. Confirm your own situation with your financial institution or the CRA.
Closing costs and the welcome tax credit
Since January 1, 2026, eligible first-time buyers in Quebec may recover up to $5,875 of the welcome tax through a refundable credit. At $425,000 in Montreal, the duties are under that amount, so an eligible buyer may get the full amount back. The catch: the city bills you first. You need the cash at closing and recover it later, through your tax return or an advance payment request.
Your own numbers
This page is a framework. A mortgage professional can run your actual income, debts and credit, and give you a written pre-approval. I can refer you to one or two I work with, or you can bring your own.
Common questions
Can two incomes be combined?
Yes. Lenders use gross household income for co-borrowers. Both people's debts are counted too.
Does a bigger down payment always lower the income I need?
In these scenarios, yes, because the loan and the insurance premium both shrink. The effect is modest compared with what other debts can do.
Is self-employment income treated the same way?
Usually not. Lenders often average two years of declared income. Speak with a mortgage professional early.
What if the condo fees are low?
Low fees help your ratios, but check the contingency fund and the syndicate's documents. Fees that are too low can mean a special assessment later.
Next step
Book a 30-minute buyer call. We look at your target price, your down payment and the neighbourhoods that fit, and I tell you what to prepare before you see a lender. Book a 30-minute buyer call
Prefer to read first? Download the first-time homebuyer kit
Related guides
Delaram Farzin, Residential Real Estate Broker (Courtière immobilière résidentielle), Groupe Sutton Centre-Ouest, real estate agency. This page is general information, not legal, tax or financial advice.
Sources: Government of Canada (1) · Government of Canada (2) · Government of Canada (3) · Government of Canada (4)
