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How AffordEMI works out what you can afford in Canada
Two numbers drive everything on this page: the payment formula lenders use, and the share of your income they will let that payment take. For Canada the conservative ceiling is 40% of net monthly income across all your obligations, and a stretched approval reaches 44%. The default rate is 7.2% a year on vehicle finance and 9.0% on two-wheelers, which are market averages rather than an offer to you.
The formula
EMI = P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1), where P is the amount financed after your down payment, r is the annual rate divided by twelve, and n is the term in months. Reducing balance, monthly rest, no balloon and no final lump sum — every instalment shown clears the debt in full by the end of the term.
Why 40% and not more
Your existing commitments come out first, so what remains is genuinely available rather than theoretical. The dashed mark on the meter sits at 20% of income, which is where most planners put the vehicle on its own, because fuel, insurance, servicing and parking are never inside the instalment. The gap between that dashed mark and the 40% line is the difference between what a lender will approve and what leaves you room to live.
Questions people ask about car finance in Canada
What is the TDS ratio lenders use?
Total debt service — all your monthly debt payments plus housing costs as a share of gross income. Lenders generally want it at or under 44%, and a car payment competes directly with a mortgage for that room. If you are planning to buy a home in the next couple of years, a large car payment is one of the fastest ways to shrink the mortgage you qualify for.
How much tax is added to the MSRP?
It depends on the province. Ontario adds 13% HST, Quebec around 15% combined, British Columbia roughly 12% including PST, while Alberta adds only 5% GST. Freight and PDI are extra again. Pick your province and the calculator applies the loading before computing the payment.
Are 84-month and 96-month car loans a good idea?
They are common in Canada and they are how buyers end up underwater — owing more than the car is worth for most of the term, unable to sell or trade without writing a cheque. This tool caps tenure at 84 months so you can see what that does to total interest. If the payment only works at seven years, the car is above budget.
Does the winter change what I should buy?
It changes the running cost more than the payment. Budget for a second set of winter tires and rims, which is a real annual expense, and remember that EV range falls significantly in deep cold. The "left each month after this" figure on every card is where that money has to come from.
Where the prices come from
MSRP before provincial and federal tax for popular variants on sale now, curated by hand rather than scraped live. Ontario adds 13% HST and Quebec around 15% combined, while Alberta adds only 5% GST. Prices move constantly — treat every figure here as a starting point and confirm with the dealer before you commit to anything.
What this page never does
- No account, no login and no email address to run a calculation.
- Your salary is never sent to a server. The maths runs entirely in your browser.
- Sharing a result encodes your inputs into the link, so you choose who sees them.
- No lending, broking or advice. See the disclosure for how this site is funded.