MONTHLY SURPLUS Subtract your expenses from your income.
FUTURE (as a homeowner)
PRESENT
Total net monthly income (box A)
$
$
(minus) Total monthly expenses (box E) Monthly surplus after expenses
-$
-$
$0.00
$0.00
Affordability rules These two simple rules will tell you how much you can afford to pay for a home. Affordability rule #1: Your monthly housing costs should be equal to or less than 32% of your average gross monthly income. This percentage is your gross debt service ratio (GDS). Affordability rule #2: Your monthly debt load should be equal or less than 40% of your average gross monthly income. This percentage is your total debt to service ratio (TDS).
MONTHLY MAXIMUM
FUTURE
(Enter amount from box B)
(Enter amount from box B)
Total gross monthly income (before taxes and deductions)
$
$
(Enter amount from box C)
GDS: Gross income x 0.32 = your maximum monthly housing costs including mortgage P rincipal and I nterest, property T axes and H eating costs (PITH) and 50% of your condo fees (if applicable). $
$
(Add the amounts from boxes C and D and enter the total here) $
TDS: Gross income x 0.40 = your maximum monthly debt load (all PITH costs plus your total monthly loan and debt payments).
$
If your future amounts are higher than your monthly maximums, you may have trouble qualifying for a mortgage. You can also calculate different budget, purchase price and down payment scenarios to explore your options.
Canada Mortgage and Housing Corporation
Page 7 of 17
25/04/2017
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