Insights · Money Globe X Research · October 25, 2026

Income Needed for a $1 Million Mortgage in Canada

Key points

• A $1,000,000 mortgage needs $260,900 in yearly gross income in our example, as of October 25, 2026.
• The monthly payment is $6,511.44 at 6.19%, but lenders check you at the stress test rate of 8.19%.
• Housing costs must stay under 39% of gross income, and all debts under 44%.
• Less than 20% down means mortgage default insurance is required, which adds a premium.
• A different rate, price or down payment changes the income needed.

What income does a $1 million mortgage need?

Our example uses a $1,250,000 home, 20% down and a 25-year amortization. Amortization is the number of years it takes to pay the mortgage off in full. The rate is 6.19%, the Bank of Canada's 5-year conventional mortgage rate as of October 21, 2026.

That leaves a mortgage of $1,000,000. The monthly payment is $6,511.44. To qualify, the calculator shows you need $260,900 a year in gross income. Gross income is what you earn before tax and other deductions.

These figures are as of October 25, 2026. They are an example, not a lender's offer. You can try your own numbers on our mortgage calculator page.

Why the income needed is higher than the payment suggests

Canadian lenders do not only check whether you can afford the payment at today's rate. They run a stress test. A stress test checks that you could still cope if rates were higher. The rule is to qualify at the higher of your contract rate plus 2% or 5.25%.

In our example, 6.19% plus 2% gives a stress test rate of 8.19%. Your income has to support the mortgage at that higher rate, even though you pay 6.19%.

Two ratios then set the limit. GDS, or gross debt service, says housing costs must stay under 39% of gross income. TDS, or total debt service, says housing costs plus your other debts must stay under 44%.

Because of these limits, the income needed is well above the $6,511.44 monthly payment multiplied by 12.

How price and down payment change the answer

The same rules give different results for different homes. With a $750,000 price, 20% down, 6.19% and 25 years, the mortgage is $600,000. The payment is $3,906.86, and the income needed is $157,800.

Now take a $1,000,000 home with 10% down. The mortgage is $927,900. The payment is $6,041.96, and the income needed is $239,800.

That second example has less than 20% down, so mortgage default insurance is required. This insurance protects the lender if a borrower stops paying. The example shows a premium of $27,900.

Minimum down payments also depend on price. It is 5% of the first $500,000 and 10% of the part up to $1.5 million. At $1.5 million or more, it is 20%.

The rate backdrop behind these numbers

The Bank of Canada policy rate was 2.25% as of October 22, 2026, unchanged from the prior reading. The 5-year conventional mortgage rate was 6.19%, also unchanged.

Government of Canada bond yields moved lower. The 2-year yield was 3.22%, down from 3.32%. The 10-year yield was 3.78%, down from 3.90%.

Your mortgage rate sets both your payment and your stress test rate. Any change in the rate you are offered changes the income needed. A different amortization also changes it.

The stress test is a Canadian rule. For comparison, the US 30-year mortgage rate was 7.32% as of October 22, 2026, but US lenders use their own tests.

What else lenders look at

Income is only one part of the picture. Car loans, credit cards and other debts count toward the 44% TDS limit, so they can raise the income you need.

Lenders also review your credit history, your job and your down payment. Each lender may apply its own checks on top of the rules above. This article is for education only. A mortgage professional can review your own situation.

See the live numbers: Mortgage calculator (with income needed) · Canadian housing by province · Interest rates and decision dates

Questions

Educational information only - not financial, investment, tax or legal advice. Figures are as of the date shown and can change.