# How the Affordability Calculator Works

> Tiered down payments, default-insurance premiums, and what actually moves purchasing power.

Category: Calculator Guide
Last verified: 2026-08-02
Source: https://ratellow.com/mortgages/affordability-calculator/guide

## TL;DR
- Once income caps the mortgage, each extra dollar of down payment raises the maximum price by one dollar — it does not unlock extra borrowing.
- Insured price cap is $1.5M (raised December 2024). Above that, 20% down is mandatory.
- Premium bands: 4.00% / 3.10% / 2.80% of the mortgage by down-payment band. Provincial sales tax on the premium is cash at closing in ON, QC, and SK.