![]() ![]() Lenders are willing to lend more to a borrower who has proven their ability to pay bills on time compared to one who has not. ![]() Increase your credit score: If you have a low credit score, increasing your credit score could help your eligibility for mortgage insurance and better terms on your mortgage.You can also save on CMHC mortgage insurance and skip on mortgage insurance premiums altogether if you have a down payment of 20% or more. Save up a larger down payment: A larger down payment can lower your mortgage borrowing and lead to smaller payments and less interest over the lifetime of your mortgage.There are a number of ways that borrowers can increase their mortgage affordability and lower their costs over the lifetime of their mortgage: How to Increase Your Mortgage Affordability Your total monthly expenses cannot exceed your net (after-tax) monthly income.See the section on stress-testing below for details. These expenses include:įor GDS purposes, your mortgage payment may be computed at an interest rate higher than your current rate. The GDS ratio is calculated by dividing your annual housing-related expenses by your gross annual income. Under CMHC regulations, your gross debt service (GDS) ratio cannot exceed 39%. ![]() Half of your condo fees (if applicable)įor TDS purposes, your mortgage payment may be computed at an interest rate higher than your current rate.Your mortgage payment (both principal and interest).The TDS ratio is calculated by dividing your total housing-related and debt expenses by your gross annual income. Under CMHC regulations, your total debt service (TDS) ratio cannot exceed 44%.Your down payment directly imposes a limit on your maximum purchase price.Your affordability is the minimum of all the values shown. Here’s a breakdown of each factor impacting your home affordability and the limit it places on your purchase price. ![]()
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