When applying for mortgage financing the mortgage broker will immediately ask you for certain pieces of information.
1. What is you and your partner’s gross income, and what are the sources of the income.
2. What are your payments to credit cards, loans, leases, alimony, etc.
3. What is the price range of the property you are interested in buying
Why do we ask these questions? Because we are going to reduce you, the future mortgagor, to a few mathematical ratios (I apologize).
GDSR
GROSS DEBT SERVICE RATIO – 32%
GDSR is the ratio of your gross income, reduced to 32% of that amount that can be allocated to mortgage debt, property taxes, ˝ condo fees, an allocation towards heat (very important in Canada). i.e. $50,000.00 gross income = $4,166.00 per month = $1,330.00 applicable monies
$1,330.00 - $75.00 heat – monthly taxes – ˝ condo fees = balance allowance for mortgage payments.
TDSR
TOTAL DEBT SERVICE RATIO
TDSR is the ratio of your gross income, reduced to 40% of that amount that can be allocated to (see above) mortgage debt, property taxes, ˝ condo fees an allocation towards heat and all other outside committed payments.
Outside Committed Payments
- auto loans
- auto leases
- credit card payments
- lines of credit
- student loan payments
- loans
- alimony
- child support payments
- personal guarantees on other person’s loans – i.e. son’s motorcycle loan, personal guarantee on daughter’s mortgage!
TDSR
i.e. $50,000.00 gross income =$4,166.00 per month = $1,330.00 applicable monies
$1,330.00 - $75.00 heat – monthly taxes – ˝ condo fees – all monthly committed payments = balance allowable for mortgage payments.
These calculations determine, in the eyes of credit grantors, your ability to service the mortgage debt load.
Rates For
Fri, Jul 30, 2010
6:05 am
| 1 Year (Closed) | |
| CIR: 2.70 | Bank: 5.65 |
| 1 Year (Convertible) | |
| CIR: 2.70 | Bank: 5.65 |
| 1 Year (Open) | |
| CIR: 2.70 | Bank: 5.65 |
| 2 Years | |
| CIR: 3.45 | Bank: 3.65 |
| 3 Years | |
| CIR: 3.5 | Bank: 4.1 |
| 4 Years | |
| CIR: 3.89 | Bank: 5.24 |
| 5 Years | |
| CIR: 4.19 | Bank: 5.80 |
| 7 Years | |
| CIR: 5.15 | Bank: 6.0 |
| 10 Years | |
| CIR: 5.49 | Bank: 6.19 |
