CURRENT RATES

5 Year Mortgage Rates
Term TypeRatePromo & Info
5 YearFixed (standard)2.49%
5 YearFixed (promo)2.29%-*call for restrictions
-High Ratio Only
-Meet property guidelines
5 YearFixed (promo)2.49% & -Condo Doc Review, Reimbursement $500 *call
5 YearVariable (promo)2.10%
* Subject to change without notice *OAC *Some Underwriting Restrictions Apply
Our Mortgage Rates
TermTypeRate
2 YearFixed2.19%
3 YearFixed2.29%
4 YearFixed2.39%**High Ratio Only
5 YearFixed2.29%**restricted, call for details
6 YearFixed2.99%
7 YearFixed2.99%
10 YearFixed3.54%

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MORTGAGE QUALIFICATION CALCULATOR

One of the most important factors for a lender in evaluating whether or not to lend you money are the ratios they use to calculate your income and expenses. Because every lender wants their money back with interest they are careful in verifying your ability to pay back the loan.

Not all income and debts are created equally so in addition to formulas used to calculate borrower eligibility, there is also discretion used in determining the types and amounts of both income and debt that will be utilized in the various financial formulas by the lender.

For Example:

  • Credit Cards – Many lenders will take 3% of your total balance when calculating your monthly payment on a credit card balance NOT the actual minimum payment you are obligated to make. This can make a borrowers estimate on affordability much different than what a lender will actually allow
  • Bonus Income – You may find that some lenders will use only ½ of your bonus income over the past 2 years, or that they will take the lowest bonus over the past 3 years. They can all approach this differently so your mortgage broker will have to help determine your best choices
  • Commission income – You may have had a very big year-to-date that far exceeds your previous years, but, you might find out that more weight is being placed on the past 2 years that were filed with Canada Revenue Agency.
  • Rental Income – Many lenders will take only a portion of your rent into account when doing their calculations. For instance many lenders will use only 50% of gross rental income in their calculations. Some are more generous and use 80% of the gross rental income, and others will have a ratio minimum based on the Debt Coverage Ratio Formula.

How do lenders qualify borrowers?

Gross Debt Service Ratio (GDSR) – The measurement of a borrower’s income in comparison to principal payments on the mortgage, interest payments on the mortgage, taxes and ½ of the condo fees (if property is a condo).

GDSR = PITH +1/2 Condo Fee (principal + interest + taxes + heat + ½ condo fees)

Gross Income

  • This percentage is the proportion income being used to service the cost the mortgage, taxes, heat and ½ off the condo fees
  • All lenders vary on policy, with the exception usually being on High Ratio Insured Mortgages, but you will typically see maximum ratios of 32% to 39%
  • Lenders that choose to lend on ratios that exceed 39% are considered to be accommodating higher risk. Some lenders are more lenient than others in exceeding these types of ratios
  • Lenders that take on higher risk will usually charge a higher interest rate

Total Debt Service Ratio (TDSR) – This ratio takes things one step further and includes all variables in the GDSR plus all other debt obligations such as: car loans, credit cards, student loans etc.

TDSR = PITHOD (principal + interest + taxes + heat + ½ condo fees + other debts)

Gross Income

  • This percentage is the proportion of income being used to support the cost of the mortgage, taxes, heat, ½ condo fees and other debt obligations
  • All lenders can vary on policy, with the exception usually being on High Ratio Insured mortgages, however, you will typically see maximum ratios of 40% to 45%
  • Lenders that choose to lend on ratios that exceed 45% would be considered to be accommodating higher risk. Some lenders are more lenient than others in exceeding these types of ratios
  • Lenders that take on more risk will usually charge a higher interest rate

Debt Coverage Ratio (DCR) – Debt Coverage Ratio is used most commonly to measure the income being produced by a revenue property versus the debt expense of a revenue property, or a portfolio of revenue properties. To calculate a DCR you would divide a property’s annual Net Operating Income –NOI- by its annual debt service.

DCR = (Income – Vacancies and Expenses)
              (Total Mortgage Payments & Accrued interest)

Due to the number of ratios and exceptions involved in calculating income, debts and equity it is very important to speak to a professional before you go shopping for a home to ensure your situation and planned purchase will be a good fit with one of the lenders.