Mortgage Qualifying in Canada
Here's how mortgage qualifying in Canada works (regulated by OSFI - Office of the Superintendent of Financial Institutions )... One can only qualify to spend up to 39% of their total household, gross income toward basic home expenses which include mortgage payments, property taxes and heating costs. It's important to know that exact calculations are only used for property taxes in this equation. An estimate of usually no less than $100/mth is used for heating costs and when it comes to mortgage payments, the BoC's 5 year benchmark rate of 4.64% is used instead of the actual rate which could be half that. So what all this math boils down to is that what one can actually qualify to spend about 30% of their gross income on mortgage payments but wait... That's assuming your credit is top notch. If you have more of an average credit score, you could be limited by another 5% less. AND this is all only if all your other debt payments (credit cards, car loans, lines of