In 2025, the dream of homeownership in British Columbia is still alive — but getting there requires a grounded understanding of what you can truly afford. Whether you’re a first-time buyer in Surrey, a family upgrading in Abbotsford, or relocating to Edmonton for a fresh start, mortgage affordability isn’t just about what a lender approves — it’s about what fits your life.
This guide breaks down the key factors that determine how much mortgage you can realistically afford in today’s market, using up-to-date benchmarks and insights specific to BC and Alberta buyers. For foundational knowledge, explore these mortgage basics every home buyer in Surrey must know.
Understanding Affordability: Lender vs. Reality
Banks and mortgage brokers often use a mix of calculations to determine affordability. But even if you qualify on paper, that doesn’t mean you should stretch your budget.
Lenders typically consider:
- Gross Debt Service (GDS) Ratio: No more than 39% of your gross monthly income should go to housing costs (mortgage, property tax, heating, condo fees).
- Total Debt Service (TDS) Ratio: No more than 44% of gross monthly income should go toward all debts combined.
Example:
If your household income is $110,000 per year (~$9,166/month), lenders may approve housing costs up to $3,574/month under GDS — but only if your other debts are minimal.
Key Affordability Inputs You Control
- Your Gross Household Income
Whether salaried, self-employed, or commission-based, lenders will look at verified income over the past 2 years — especially for variable earners. - Down Payment Amount
As of 2025, the minimum down payment rules remain:
- 5% for homes up to $500,000
- 10% on the portion from $500,000 to $999,999
- 20% for homes $1 million+
The more you put down, the less you borrow — and the more affordable your monthly payments become. A 20% down payment also avoids CMHC insurance premiums. For context, review the costs involved in refinancing a mortgage — an option buyers often consider when affordability tightens.
- Interest Rate Type and Term
Today’s mortgage rates in BC have stabilized following several Bank of Canada cuts, but economic uncertainty means rates could fluctuate.
- Short-term fixed or variable options are gaining traction
- Choose a term that aligns with your risk tolerance and timeline. This guide to fixed rate versus variable rate mortgages in Canada offers helpful comparisons.
- Credit Score
Higher scores (680+) get access to better rates and more flexible terms. Lower scores may require larger down payments or private lending options. - Other Debts
Car loans, credit cards, student loans — they all reduce how much mortgage you can carry. Many buyers in 2025 are opting to refinance or consolidate debt before applying. Learn more in this debt consolidation vs. mortgage refinancing guide.
2025 Price Benchmarks: What Can You Afford?
Let’s use real market data to understand affordability in each region:
Abbotsford:
- Benchmark detached home: ~$970,000
- With 10% down (~$97,000), your mortgage would be ~$873,000
- Monthly mortgage payment (5.1% 5-year fixed, 25-year): ~$5,100 + taxes/fees
- Requires household income of ~$160,000/year to qualify comfortably
Surrey:
- Average townhome price: ~$850,000
- 10% down (~$85,000), mortgage ~$765,000
- Estimated payment: ~$4,400/month
- Suggested income: $140,000–$150,000/year
Edmonton:
- Average detached home price: ~$440,000
- 5% down (~$22,000), mortgage ~$418,000
- Monthly payment: ~$2,400
- Ideal for households earning ~$85,000+
Want to test your own numbers? Use this CMHC mortgage payment calculator to estimate monthly affordability.
CMHC and Stress Test Rules in 2025
Although rates have dropped, the federal stress test still applies — meaning you must qualify at a rate 2% higher than the actual contract rate, or the Bank of Canada’s benchmark (whichever is higher).
This can reduce the max mortgage you qualify for by 10–15% compared to the actual rate you’ll pay — another reason it’s essential to work with a mortgage advisor who understands how to navigate the rules. Here’s why you should work with an independent mortgage professional.
Why Local Expertise Matters
Every market has its quirks. In Fraser Valley, new builds and rural properties may have different insurance or zoning implications. In Surrey, buyers often compete in newer subdivisions with higher strata fees. And in Edmonton, the affordability window is ideal — but only if buyers understand property tax structures and lender zoning policies.
At Sandhu & Sran Mortgages, we help buyers in Abbotsford, Surrey, and Edmonton make confident, well-informed mortgage decisions — not just approvals. To see what we offer in your area, check out the top benefits of working with a mortgage broker in Surrey BC.
Strategies to Improve Affordability in 2025
Understanding your borrowing limit is just the start. Now comes the strategic part: improving what you can afford and optimizing your mortgage setup. Whether you’re entering the market, renewing, or upsizing, small moves can have a big impact on long-term affordability.
- Improve Your Credit Profile
Your credit score is one of the biggest levers you have over your interest rate. In 2025, most prime lenders want to see:
- 680+ for insured or default-insured loans
- 720+ for the best fixed/variable rates
To boost your score:
- Pay all bills on time, every time
- Keep credit utilization under 30%
- Avoid new loans before applying
- Review your credit report for errors
Need help rebuilding or qualifying? Explore mortgage options for first-time homebuyers in Surrey.
- Minimize Existing Debt Obligations
The less monthly debt you carry, the more mortgage you can afford. Strategies include:
- Paying off high-interest credit cards
- Consolidating debts into one lower-payment loan
- Choosing a car with lower payments
Learn how debt consolidation vs. mortgage refinancing can free up room in your TDS ratio.
- Consider 30-Year Amortization (If Eligible)
As of 2025, the federal government now allows 30-year amortizations for first-time buyers with insured mortgages on newly built homes. This reduces monthly payments — boosting what you can afford in the eyes of lenders.
Check if you qualify by reviewing first-time homebuyer incentives and amortization changes.
- Look Beyond Traditional Lenders
If your credit score or employment type makes traditional lending tough, private lending or alternative lenders may help you buy sooner — with a plan to refinance into a prime mortgage later.
Explore this overview of what is a private mortgage and who can apply.
- Budget for Additional Costs
Your mortgage is just the beginning. Smart buyers also account for:
- Closing costs (1.5–3% of purchase price)
- Property taxes (varies by municipality)
- Utilities and maintenance
- Emergency fund for rate changes or job shifts
Not sure what to expect? Review the top 5 things to avoid when refinancing.
Case Study: Surrey Family Buying Their First Townhome
Scenario: A couple with a household income of $145,000 wants to buy a $850,000 townhome in Surrey. They have $90,000 saved.
Approach:
- 10% down → $85,000 + ~$12,000 in closing costs
- Remaining mortgage: ~$765,000
- With a 5-year fixed rate at 5.1%, monthly payment = ~$4,400
- Total housing costs ~36.5% of income → within GDS limits
With minimal car payments and no credit card debt, they passed the stress test at 7.1%, secured approval, and closed in 45 days. Working with Sandhu & Sran, they received competitive quotes and grant guidance — ensuring affordability now and flexibility later.
Case Study: Edmonton Buyer Upsizing to Detached Home
Scenario: A single buyer earns $92,000 annually and is upgrading from a condo to a $460,000 detached home.
Approach:
- 5% down → $23,000
- Used proceeds from condo sale to cover this
- Chose 25-year amortization with 3-year fixed at 5.0%
- Payment = ~$2,450/month → ~32% of gross income
With a strong credit score and zero debt, approval was fast. This buyer also opted for prepayment privileges, giving them room to pay down faster without penalty.
For more on timing the market, see when to refinance your mortgage in Surrey.
FAQs: Mortgage Affordability in 2025
Q1. What’s the minimum income needed to buy in Abbotsford or Surrey?
It depends on the home type, down payment, and debt load. Typically:
- Condos/Townhomes: $110,000–$140,000+
- Detached Homes: $150,000–$175,000+
Try a pre-approval to get specific.
Q2. Should I wait to buy if interest rates may drop further?
If you’re ready, buying now may give you access to more listings and negotiating power. Plus, most lenders let you refinance or blend if rates drop later.
Q3. Does my pre-approval guarantee I’ll be approved?
Not entirely. If your finances or the property changes, you may need to requalify. Avoid taking on new loans or switching jobs during the process.
Q4. Can I get approved with a low credit score?
Yes — with the right broker. You may need a higher down payment or to work with an alternative lender or private mortgage provider.
Q5. Do I need a real estate agent and a mortgage broker?
Yes — they handle different roles. The agent helps you buy the home, while a broker secures financing. Having both gives you full support.
Final Thought
Your mortgage affordability is about more than just income and rates — it’s about long-term sustainability and peace of mind. With rising home prices in key markets and policy changes evolving, now is the time to understand where you stand.
Whether you’re a first-time buyer or planning a move, Sandhu & Sran Mortgages can help you decode your options and guide you to a mortgage that fits your life. From quick mortgage approvals to refinancing strategies, we’re here to support your homeownership journey in Abbotsford, Surrey, and Edmonton.