Just because the numbers say you can, doesn’t mean you can afford it!

Marci • April 13, 2012

While most of us have a basic knowledge of our monthly expenditures, others need to explore their finances to find out. To come to terms with your maximum mortgage payment, you need your monthly gross income and your monthly debt payments. Calculate 33% and 44% of your monthly gross income.

 

Your monthly mortgage payment, plus mortgage insurance, property tax and strata fees (if applicable) must be less than the 32%. Now, take those monthly payments and add all other monthly debt (payments to loans, credit cards, leases, etc.). This amount must be less than the 44%.

 

Going to the max

In the current environment of low interest rates, you want to be cautious about going to your maximum mortgage amount because an increase in rates could be devastating.

 

For example, a couple with a combined income of $135,000 might qualify for a $700,000 mortgage at 3.5%. Their payments would be approximately $3,500 a month. If rates increase to 5%, that monthly payment increases to $4,075 – $6,900 more each year. The amount they would qualify for at that higher rate would reduce substantially to $585,000.

 

There are times when you fall in love with a house. If it sits at your maximum it means you can afford it, right? Yes, on paper, you can afford your maximum, but only in rare circumstances would I suggest it.

 

So, if love isn’t a good enough reason to go to your maximum, what is?

 

An almost certain increase in income and a significant down payment (35% or more).

 

Having a job where your salary is almost guaranteed to increase makes going to your maximum easier. As is when the maximum is calculated on one income but a second income will be introduced (ie – a spouse returning to work after mat leave), or the possibility for income from a rental suite.

 

These things don’t make the deal work, they simply ensure an increased income to make going to the maximum safer.

 

Getting a higher priced property is easier with two incomes, a larger down payment, familiarity with making mortgage payments, an expectation of future funds to apply to the mortgage (bonuses, inheritance), a more secure job, or the intention to stay in the house longer.

 

Lean towards a cheaper option when a rate increase would make your budget impossible, the budget required would be difficult to stick to, economic or income expectations are uncertain or you are planning on adding to your family.

 

Yes, getting a more expensive house is tempting and there are times when it will work and be worth it. Take stock of your personal finances to ensure it’s the right decision and won’t lead to a painful outcome.

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RRSP Home Buyers’ Plan Explained: A Smart Way to Buy Your First Home

By Marci Deane • July 22, 2026
Saving for a down payment is one of the biggest challenges first-time buyers face. What many don’t realize is that the Canadian government offers a program designed to make it easier—the Home Buyers’ Plan (HBP) . This program allows you to withdraw money from your RRSP to help purchase your first home, without immediate tax consequences. Here’s how it works: Who Qualifies? To be eligible, you generally need to be a first-time home buyer. In practical terms, this means you must not have owned a home in the past four years, nor lived in a property owned by your spouse or partner during that time. There are also special allowances if you’re living with a disability or helping a relative with a disability. In these cases, you can use the HBP even if you’ve owned a home more recently. How Much Can You Withdraw? Under the program, you can access up to $35,000 from your RRSP as an individual. Couples can combine their withdrawals for a total of $70,000 . These funds must have been in your RRSP for at least 90 days before you take them out. Paying It Back The HBP isn’t “free money”—it’s an interest-free loan from your own retirement savings. You’ll have 15 years to repay the full amount back into your RRSP, starting in the second year after withdrawal. Each year, the CRA will send you an HBP Statement of Account outlining how much needs to be repaid. If you don’t make your repayment in a given year, that amount will be added to your taxable income. Why It’s a Smart Strategy The HBP can give first-time buyers a powerful boost toward homeownership. It helps you put together a larger down payment, which can reduce your mortgage amount and monthly payments. Just remember: it’s important to balance the short-term benefit of homeownership with the long-term impact on your retirement savings. Next Steps Thinking about using the Home Buyers’ Plan? Let’s sit down and review whether it’s the right move for you. Together, we can create a strategy that gets you into your first home while keeping your future financial goals on track. 📞 Reach out anytime—it would be a pleasure to guide you through the process.

Bank of Canada Holds Rate at 2.25% — July 15, 2026

By Marci Deane • July 15, 2026
The Bank of Canada announced today that it is holding its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The tone of today's announcement is notably more optimistic than previous months. Here's what's changed and what it means for you.

Let’s Talk About Getting Top Dollar for Your Property

By Marci Deane • July 8, 2026
When it comes to selling your home, most people think the first call should be to a real estate agent. But the smartest first step often isn’t with your agent—it’s with an independent mortgage professional. Why? Because your mortgage plays a bigger role in your bottom line than most people realize. Planning to Buy After You Sell If selling means you’ll also be purchasing another property, you’ll want to know exactly where you stand financially before listing. Mortgage rules change regularly, and qualifying once doesn’t guarantee you’ll qualify again. Getting a pre-approval in place ensures you know what you can afford and eliminates surprises later. On top of that, reviewing the terms of your existing mortgage could uncover options you may not have considered. For example, porting your mortgage instead of arranging a brand-new one could save you thousands. Selling Without Buying Even if you aren’t planning to buy right away, there’s still an important step: understanding the cost of breaking your mortgage. Unless your mortgage is open, penalties apply—and they can be significant. By reviewing the numbers with a mortgage professional, you might find that simply adjusting your timeline could reduce or even avoid costly fees. Navigating Life Changes In situations like a marital breakdown, it can feel like selling the family home is the only path forward. But that’s not always the case. With the right guidance and a legal separation agreement, one spouse may be able to buy out the other, keeping the home and providing stability for everyone involved. The Bottom Line Selling your property is more than just putting a sign on the lawn—it’s about creating a financial plan that protects your equity and positions you for the best possible outcome. Before you take the leap, let’s sit down and review your options. 📞 If you’re ready to talk strategy and make sure you get top dollar for your property, I’d be happy to connect anytime.