PEI Mortgage Affordability Calculator (2025)

Updated

Prince Edward Island has some of the most affordable housing in Canada, with average home prices around $360,000 — well below the national average. Use the mortgage affordability calculator below to estimate how much house you can afford on the Island.

Mortgage affordability in PEI

How much mortgage you can afford depends on your household income, existing debts, and the mortgage rate you qualify for. PEI’s lower home prices make homeownership achievable at income levels that would fall short in larger cities.

Key inputs include your down payment, mortgage rate, and existing debts. Adjusting any input in the calculator shows you how affordability changes.

If your down payment is less than 20%, you will need mortgage default insurance, which adds a premium to protect the lender.

PEI minimum down payment chart

Purchase Price Minimum Down Payment
Less than $500,000 5% of purchase price
$500,000 to $999,999 5% of first $500K + 10% of remainder
$1 million or more 20% of purchase price

For a $360,000 home (near PEI’s average), the minimum down payment is $18,000. See the down payment calculator for exact amounts.

What ratios are used to estimate mortgage affordability?

Lenders use two key ratios:

Gross Debt Service Ratio (GDS) — measures monthly housing costs relative to gross income. This calculator uses 35%.

GDS = (Mortgage Payments + Property Tax + Heating + 50% Condo Fees) / Gross Annual Income

Total Debt Service Ratio (TDS) — adds all other debts to housing costs. This calculator uses 42%.

TDS = (All Housing Costs + All Other Debt Payments) / Gross Annual Income

The CMHC maximum GDS is 39% and maximum TDS is 44%. Learn more with the debt service ratio calculator.

How much house can you afford in PEI?

These estimates are based on a 4.5% interest rate, 25-year amortization, minimum down payment, and $750 in monthly debt obligations.

Household Income Estimated Affordability
$50,000 ~$240,000
$60,000 ~$290,000
$70,000 ~$340,000
$80,000 ~$390,000
$100,000 ~$485,000
$120,000 ~$580,000

At approximately $75,000 to $80,000 in household income, a PEI buyer can comfortably afford the average home price of $360,000.

How much income to buy a $360,000 house in PEI?

Approximately $75,000 or more per year, based on a minimum down payment of $18,000, 25-year amortization at 4.5%, with $750 in monthly debt payments.

How much income to buy a $500,000 house in PEI?

Approximately $105,000 or more per year, based on a minimum down payment of $25,000, 25-year amortization at 4.5%, with $750 in monthly debt payments.

PEI land transfer tax

PEI charges a real property transfer tax of 1% on the greater of the purchase price or the assessed value:

Purchase Price PEI Transfer Tax
$250,000 $2,500
$360,000 $3,600
$500,000 $5,000

While PEI does charge this tax, it is lower than many other provinces. Use the PEI land transfer tax calculator for exact amounts.

Additional costs when buying in PEI

  • Land transfer tax — 1% of purchase price or assessed value (whichever is greater)
  • Mortgage insurance — required if less than 20% down; use the mortgage insurance calculator
  • Property taxes — PEI has higher property tax rates than some provinces, which factors into GDS
  • HST — PEI charges 15% HST (5% federal + 10% provincial) on new construction; resale homes are HST-exempt; see the PEI sales tax calculator
  • Closing costs — legal fees, title insurance, home inspection; typically 1.5% to 4% of purchase price

Frequently asked questions

How much house can I afford making $80,000 in PEI?

Approximately $390,000 based on a 4.5% rate, 25-year amortization, minimum down payment, and $750 in monthly debt.

Does PEI have a land transfer tax?

Yes. PEI charges a real property transfer tax of 1% on the greater of the purchase price or the assessed value.

What is the minimum down payment in PEI?

5% on the first $500,000, 10% on $500K–$999K, and 20% on homes $1 million or more.

Mortgage affordability across provinces