August 10, 20263 min read
For many Canadian homebuyers, this question comes up before they are ready to make an offer. Affordability is not just a salary multiple. Lenders compare qualifying income with housing costs and recurring debts, while you should also decide what payment still leaves room for normal life.
What lenders actually look at
Here is what matters most:
- Start with gross household income, then list monthly debts such as car loans, student loans, credit cards and support obligations.
- Estimate property taxes, heating and condominium fees where applicable, because qualifying is based on more than the mortgage payment.
- Remember that federally regulated lenders normally qualify borrowers using the mortgage stress test, which can reduce the amount available compared with a payment calculated only at the contract rate.
- Set a personal ceiling below the lender maximum if you want room for savings, repairs, travel or future family costs.
A pre-approval can turn the calculation into a realistic purchase range before you start viewing homes.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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