![]() The premium amount will be added to the mortgage, and will then become part of your ongoing regular payments. Since your down payment is less than 20% of the home purchase price, mortgage default insurance is required. If you change your down payment to more than 20%, you may not require mortgage default insurance and the maximum amortization period can be 30 years. In this scenario, the maximum amortization period is 25 years. ![]() ¹ Note 1Canada Mortgage and Housing Corporation (CMHC), 2020 Keep in mind that if your down payment is less than 20% of the price of your home, you'll need to purchase mortgage default insurance, which can be added to the principal amount of your mortgage. Depending on the purchase price of a home, there are minimum amounts required for your down payment ² Note 2: Table - Minimum amount of downpayment required based upon the purchase price of the home Purchase price of your homeĥ% of the first $500,000 of the purchase price 10% for the portion of the purchase price above $500,000 The amount you have saved for a down payment is also another important piece of information to help determine affordability. How your down payment affects affordability It should be at or under 42% of your pre-tax income. TDS is the percentage of your monthly household income that covers your housing costs and any other debts (including car payments and other loan expenses). It should be at or under 35% of your pre-tax household income. ![]() GDS is the percentage of your monthly household income that covers your housing costs (including mortgage payments, condo fees, utilities and taxes). According to the Canadian Mortgage and Housing Corporation ¹ Note 1: List of 2 items To estimate mortgage affordability, lenders will use two standard debt service ratios: Gross Debt Service (GDS) and Total Debt Service (TDS). ![]() Learn more about factors that can affect your mortgage affordability. Knowing your total household income, how much you’ve saved for a down payment, and your monthly expenses (car payments, loan payment, living expenses, and so on), plus new expenses you’d take on (property taxes, condo fees, utilities), you can get a reasonable estimate. With a few inputs, you can determine how much mortgage you may be comfortable with and the potential price range of your future home. The first step in searching for your home is understanding how large of a mortgage you can afford. ![]()
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