British Columbia · Buyer Report
There are two numbers: what you can borrow, and what you can afford. They are rarely the same.
A lender will tell you the first. Only you can work out the second — and the gap between them is where most regret lives.
This is how the approval is actually calculated, what quietly shrinks it, and how to arrive at a number that still works on a February morning when the furnace dies.
Part one
What the lender is actually measuring
Two ratios do almost all the work. Everything else is detail.
GDS — gross debt service
What the home costs you, against what you earn
- Mortgage principal and interest
- Property taxes
- Heating costs
- Half the strata fee, if there is one
Usually capped around 39% of gross income on insured deals. Note it is gross — before tax, which is part of why the approved number feels larger than it lives.
TDS — total debt service
Everything above, plus the rest of your debt
- Everything in GDS
- Car payments and leases
- Credit card and line of credit minimums
- Student loans, support payments
Usually capped around 44%. This is the ratio that a car lease or a lingering credit card balance quietly destroys.
The stress test applies on top. Federally regulated lenders must qualify you at the greater of your contract rate plus 2%, or 5.25%. Your ratios are calculated at that higher rate, not the rate you will actually pay. It typically cuts the approval by a meaningful margin — and it applies whether your down payment is 5% or 50%.
A credit limit counts even when the balance is zero. Many lenders assess a minimum payment against your available credit, not just your balance. Closing an unused card or reducing a line of credit limit before you apply can measurably raise what you qualify for. Do it two or three months ahead, not the week of.
Part two
Where the approved number and the liveable number diverge
The lender does not count your actual life
Childcare, the second car, RESP contributions, travel, the dog, what you actually spend on food — none of it appears in GDS or TDS. A file can pass both ratios and still be a household that cannot breathe.
Do this
Take the payment the lender approves, add property tax and insurance and heat and strata, and run your real budget against it for two months before you buy. If it does not work on paper, it will not work in a house.
Renewal is the risk nobody prices
You are qualified at a stress-tested rate today, but your actual payment is set by your contract rate for the term. When the term ends, the payment resets to whatever the market is then.
Watch out for
Being comfortable at today’s rate is not the same as being safe at renewal. That is precisely what the stress test exists to check — treat it as useful information, not as an obstacle.
Taxes and strata fees move
Property taxes rise. Strata fees rise, and a special levy can arrive without much warning. Neither is in your mortgage payment, and both are unavoidable.
Do this
On a strata, read the depreciation report and the minutes before you remove subjects. They will tell you what is coming.
The one-income test
If two incomes are buying, ask what happens if one of them stops for six months — parental leave, illness, a layoff. Not a prediction, just a stress test of your own.
A household that survives that question on paper is buying at the right number.
Part three
The order to work it out in
- Total your real down paymentSavings, FHSA, RRSP under the Home Buyers’ Plan, any gift — and set aside the closing costs separately. They are not part of the down payment.
- Pull your creditBefore a lender does. Errors are common and take weeks to fix. Both Canadian bureaus give you a free copy.
- Get a real pre-approvalNot an online estimate. A broker or lender pulling credit and reviewing documents gives you a number you can write an offer against.
- Build the full monthly pictureMortgage, property tax, insurance, heat, strata, plus your actual life. This is the number that decides, not the approval.
- Set your own ceiling, and write it downBefore you start viewing. Decide the maximum in a quiet room, because you will not decide it well in a competing-offer situation.
- Then start lookingWith a price range, a pre-approval, and a number you have already agreed to with yourself.
Questions we get asked
Does a pre-approval guarantee the mortgage?
No. A pre-approval is the lender’s assessment of you; final approval also assesses the property — the appraisal, the condition, the strata documents. This is why a financing condition in your offer matters even when you are pre-approved.
Will shopping for a mortgage hurt my credit score?
Multiple mortgage enquiries in a short window are generally treated as a single rate shop by the Canadian credit bureaus, so comparing lenders is not the problem. Applying for a car loan or a new credit card during your home purchase very much is.
I am self-employed. Is it harder?
It is different, not harder. Lenders generally want two years of filed returns and notices of assessment, and they look at your declared income rather than your gross revenue. There are lender programs built for self-employed borrowers — start with a broker rather than a single bank.
How much should I keep in reserve after closing?
Three months of full housing costs is a reasonable floor, six is comfortable. New owners consistently underestimate the first year — there is always something.
Work out your real number, not your maximum
We will walk through the whole picture with you — approval, closing costs, monthly carrying cost, and what is actually left over. No pressure to buy anything, and no cost.
Call 778‑234‑2000 Prefer to write? Send a message insteadPlease note: Qualifying ratios and the stress-test rate are set by lenders and federal regulators and change without much notice. This page is general information about British Columbia and Canadian rules, current at the time of writing, and is not legal, tax, financial or mortgage advice. Figures and programs change — confirm anything you intend to rely on with the relevant authority or a qualified professional. Sonny Bhinder is a licensed REALTOR®, not a lawyer, accountant or mortgage broker. Not intended to solicit properties currently listed for sale, or to cause a breach of an existing agency relationship.