What your result means
The price above is the higher of what your income can carry and what your down payment can cover, then capped at whichever is lower, because a lender needs both tests to pass. Most buyers assume the down payment is the limit. In practice, once a first mortgage, property tax and heat on your existing home are already using up part of your gross debt capacity, the income-based test (your total debt service, or TDS, ratio) is usually what caps a second property first. That is why this calculator asks about your existing home's carrying costs before it asks about the cottage.
The monthly payment shown is calculated at your real contract rate, over your chosen amortization, using the semi-annual compounding that Canadian fixed mortgages use under the Interest Act. The price itself, though, is sized using the higher federal stress-test rate, because that is the rate a lender actually qualifies you at.
Worked example
A Toronto household earning $150,000 a year, with a $2,200 monthly mortgage payment, $400 property tax and $150 heat on their city home, $300 in other monthly debts, and $100,000 saved for a cottage down payment, is shopping near Bracebridge, Ontario. They estimate the cottage's property tax at $250 a month and heat at $200 a month, and expect a 4.79% contract rate over 25 years, buying the cottage as a year-round second home. With $12,500 in monthly gross income, the 44% TDS ceiling gives $5,500 a month of total debt room. After the city home's $2,750 in payment, tax and heat, $300 in other debts, and the cottage's own $450 of tax and heat, roughly $2,000 a month remains for a cottage mortgage payment. Qualified at the stress-tested rate of 6.79% (their 4.79% contract rate plus 2 points, since that is higher than the 5.25% floor), that payment capacity supports a mortgage of a little under $291,000, plus their $100,000 down payment: a cottage in the high $300,000s, not the $1.25 million their $100,000 down payment alone would technically stretch to under the 5%/10% tiered minimums. Income, not cash on hand, is the real ceiling here.
How this is calculated
| Down payment tier (owner-occupied, year-round) | Minimum down |
|---|---|
| Up to $500,000 of price | 5% |
| $500,000 to $1,500,000 | 10% of the portion above $500,000 |
| Above $1,500,000 | 20%, and the mortgage cannot be CMHC-insured |
| Loan-to-value at closing | CMHC premium |
|---|---|
| Up to 65% | 0.60% |
| 65.01% to 75% | 1.70% |
| 75.01% to 80% | 2.40% |
| 80.01% to 85% | 2.80% |
| 85.01% to 90% | 3.10% |
| 90.01% to 95% | 4.00% |
Gross debt service (GDS) and total debt service (TDS) are capped at 39% and 44% of gross monthly income. A seasonal-only cottage, one not suitable for full-time year-round living, generally does not qualify for CMHC's low-down-payment Second Home program and is treated here like a non-owner-occupied purchase, needing 20% down with no mortgage insurance. Because the CMHC premium is added to the loan rather than paid separately, the qualifying payment used to size the price is calculated on the loan plus the premium, not the loan alone; leaving this out would let the calculator suggest a price whose real insured payment breaches the GDS or TDS limit. A 30-year amortization on an insured mortgage also carries a further 0.20 percentage point surcharge on the premium rate, which this calculator applies whenever you enter 30 years on the owner-occupied path; that longer amortization is only actually available to first-time buyers on any home, or any buyer on a new build, so confirm your own eligibility with a lender. The price search itself is capped at $20,000,000; if your result lands on that ceiling, your real maximum is at least that high and the calculator will say so. Sources: CMHC mortgage loan insurance cost, CMHC Second Home program, OSFI minimum qualifying rate.
What this calculator does not cover
It does not include provincial sales tax charged on the CMHC premium itself in Ontario, Quebec or Saskatchewan, which is paid in cash at closing rather than added to the loan. It does not model legal fees, a home inspection, or Toronto, Vancouver or Ottawa's vacancy or empty-homes taxes; for closing costs, see the land transfer tax calculator, and for what the cottage costs to run once you own it, the cottage running costs calculator. It assumes one existing property and one new cottage; it does not model a bridge loan or a rent-back. Lender-specific overlays, credit score, and a private insurer's exact underwriting rules can change what you actually qualify for. Anyone new to this should also read OwnersLog's guide to buying a cottage.
Questions
Is the down payment or my income more likely to limit what I can buy?
For most move-up cottage buyers who already carry a mortgage on a principal residence, income (the TDS ratio) is the binding constraint, because the existing home's payment, tax and heat already use up debt room before the cottage is added.
Can I use the same low down payment as my first home?
Only if the cottage is for full-time, year-round occupancy by you or your family and has year-round road access. A seasonal-only cottage is generally treated as needing 20% down.
Why is my qualifying rate higher than the rate my lender quoted?
Federally regulated lenders must qualify you at the higher of your contract rate plus 2 percentage points, or a floor currently set at 5.25%, even though your actual payments are calculated at the lower contract rate.
Does this include the CMHC insurance premium in the price shown?
Yes, when the estimate is on the low-down-payment path, the premium is added to the loan amount at the CMHC rate for your loan-to-value band before the payment is calculated.
What if I want to rent the cottage out sometimes?
Occasional short-term rental of an owner-occupied cottage is different from buying it purely as an investment. This calculator's rental option assumes you will not occupy it, which triggers the stricter 20% minimum down payment.
Last reviewed 15 September 2026 against CMHC and OSFI published rules. Next review March 2027.
This calculator gives a general estimate from the figures you enter. It is not financial, tax, legal or mortgage advice. Rules change and personal circumstances matter, so confirm with a qualified professional before you act. See the full disclaimer.