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How much can I afford?

Breakdown the amount you need to buy

How Much Can I Afford

To determine how much you can afford, you will need to look at the following factors:

Your Income

Your Income

Review all your potential income sources. These can be limited to: salary, overtime, investment income, rental income.

Your Expenses

Your Expenses

Although certain expenses such as groceries, daycare costs, travel, cable and others are not included when calculating your TDSR And GDSR you should take them into account when determining what you can afford for your mortgage payment.

It is also important that you budget to put a percentage of your income aside for
savings and future needs. 

Your Down Payment

Your Downpayment

Your downpayment will determine if your mortgage is considered conventional or high ratio. 

A conventional mortgage requires a minimum down payment of 20% of the purchase price or appraised value whichever is less.

A high ratio mortgage is required if you have less than a 20% down payment on your purchase price. This mortgage must be insured through a default insurance provider like CMHC or SAGEN. Depending on the size of your down payment a default insurance is payable based on a percentage of your mortgage amount. This premium may be added to your mortgage and repaid with your required mortgage payments 

To find out more about CMHC ​or SAGEN please refer to their websites.

Credit Commitments

Your Other Credit Commitments

Total Debt Service Ratio should equal no more than 42%-44% of your gross annual income. This will include your annual shelter costs plus payments for personal loans, credit cards, car payments, support payments, etc.

Although these limits are guidelines its important you look at your other expenses as well to determine what is truly affordable for you. Each members situation will be different and we are here to help guide you through the process.

Monthly Mortgage Payments

Your Monthly Mortgage Payments and Ongoing Costs to Maintain Your Home

Your gross debt service ratio should equal no more than 35%-39% of your gross annual income. This will include your annual shelter costs including your mortgage payment based on the Bank of Canada Qualifying rate, Annual Property taxes, heating and half of any condominium fees if applicable.