Cottage affordability calculator

Estimate how much cottage you can afford while you still carry your home. Uses your income, debts and today's qualifying rules for a second property.

Your numbers

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Enter 0 if your home is paid off.
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Example. Check the listing.
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Example.
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Include home equity you plan to use.
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Example rate. You can change it.
A cottage price you could likely carry$600,000

Lenders test you at 6.50%, higher than the rate you would pay. At the top of this range your cottage would cost about $3,150 a month with tax and heat.

Room for a cottage payment (stress tested)$3,167
Largest mortgage on that room$472,761
With 20% down, up to$602,761
Year-round with under 20% down, up to$602,761
Monthly cost at the top (payment, tax, heat)$3,150

Estimate only. Example rate 4.50%. Not a mortgage offer.

Check what I qualify for

How this works

Lenders look at your whole household: the home you live in, any debts and the new cottage together. This calculator does the same.

They test you at a higher rate than you will pay, then check that housing costs stay under 39% of income and all debts under 44%. Whatever room is left sets the cottage payment, and your down payment sets the price.

A worked example

A household earning $220,000 with a $2,800 home mortgage payment, $600 a month in other debts and $130,000 saved is tested at 6.50%. That leaves about $3,167 a month for a cottage payment, which points to a cottage of about $600,000.

What the numbers assume

  • Qualifying rate is the higher of your rate plus 2% or 5.25%.
  • Housing costs for both properties (mortgage, property tax, heat) count toward the 39% limit. Other debts are added for the 44% limit.
  • Your current home mortgage is counted at the payment you enter.
  • The low end assumes 20% down. The high end assumes a year-round cottage with insurance where your down payment allows it.
  • 25-year payoff. Condo fees, rental income and lender-specific rules are not included.

Common questions

Can I afford a cottage and a house at the same time?
Many families can. Lenders add the cottage costs to your current home costs and check them against your income at a stress-tested rate. If both fit under the limits, you qualify.
What is the stress test for a cottage mortgage?
You qualify at the higher of your contract rate plus 2% or 5.25%. It applies to cottage mortgages with or without insurance.
Does rental income help me qualify for a cottage?
Usually not for a personal-use cottage, and the insured second-home programs do not count it. Some lenders consider it on a rental property with a bigger down payment.
What are GDS and TDS?
GDS is housing costs as a share of income, with a 39% limit. TDS adds every other debt, with a 44% limit. Both are measured at the stress-tested rate.
How can I afford more cottage?
Pay off a car or card balance, add a co-owner, or use equity in your home for a bigger down payment. Using a HELOC to buy a cottage explains the last one.

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