What income carries a $400,000 mortgage?
A $400,000 mortgage at 4.43%, amortized over 25 years, has a monthly payment of $2,198.35. That is the payment you would make. It is not the payment the lender uses to decide if you qualify.
The qualifying rate is 6.43%, the contract plus 2 points. The payment at that rate is $2,662.34. Lenders then add property tax, heat, and half of any condo fee, and compare the total with gross income. A common ceiling is 39% for housing and 44% once other debts are in.
| Piece | Monthly |
|---|---|
| Qualifying mortgage payment | $2,662.34 |
| Property tax, assumed | $300 |
| Heat, assumed | $150 |
| Housing total | $3,112.34 |
| Gross income to keep housing at 39% | $7,980 |
$7,980 a month is about $95,800 a year, before other debts. A car payment of $400 adds to the total-debt side. At a 44% total-debt ceiling, $400 of other debt means the income has to cover $3,512, which is about $7,980 still if you were only at the housing cap, and higher if the debts push you. Run $3,512 divided by 0.44 and you get about $7,980 as well, in this particular assumption. Shift the tax bill and both ratios move.
This is not a pre-approval. Overtime, variable pay, a co-signer, and a 30-year amortization all change it. The full rule is in the stress test guide. If you want the payment on your rate rather than on 4.43%, use the calculator on the board, then request cheaper rates with your province and a balance range.