What can I afford?

How much you can afford depends on a few factors, the most important of which are:

  1. Total amount of gross household income
  2. How much can you come up with in cash for a down payment
  3. How much is your mortgage interest rate.

Lenders will consider two ratios in the calculations of how much you can afford.

  1. The first is called the Gross Debt Service Ratio (GDS), and this includes your monthly housing costs, mortgage payment, property taxes, heat, and one half of condo fees (If applicable) the total amounts of which should not exceed 32% of your gross monthly income.
  2. The second is called the Total Debt Service Ratio (TDS). This total monthly debt load includes all of the expenses used to calculate the GDS (above), plus any other debt obligations such as a student loan, car, credit card of any other loan payments, and together this should not exceed 42% of your gross monthly income.

Once you have determined the maximum monthly payment you can afford, you can use the mortgage calculator to experiment with some numbers and see what your purchase price range can be.

Lenders Recommended by Yolande Desjardins

Dominion Lending Centres
By Design Mortgages
110-150 Isabella Street,
Ottawa, Ontario K1S 1V7
613-791-1798 (direct)

Mortgage Brokers Ottawa.com
York Polk
121-1335 Carling Avenue, Ottawa, Ontario K1Z 8N8