Salary vs House Prices

What Salary do you need to buy a house?

What house price can you afford ?

How much mortgage can you afford ?  

What formulas is used for mortgage amount assessment?

Article Summary

  • Don’t focus on salary, rather it’s your income versus debt that matters
  • To understand affordability look at the savings left over every month after your salary is received and all monthly bills paid
  • (Debt-to-Income) DTI ratio is one of the most important qualification metrics that a lender will use 
  • DTI is needed to estimate maximum house price vs income
  • Your down payment affects the maximum price for your new house


A simple calculation is required involving: total income, total debt and DTI ratio.
A Mortgage Agent can provide this information to you immediately.

IT’S not about SALARY but rather SALARY vs DEBT

  • While a bank does care if you have a salary; they care MORE about your salary vs your debt
  • Have you ever heard someone mention mortgage terms like stress test ratio, gross debt service ratio (GDS). These are metrics used by lenders to calculate a borrower’s maximum mortgage amount
  • A bank’s major concern is whether or not you can financially handle the monthly mortgage payments. Will you miss any payments?  What is the probability that you will?
  • Remember that “salary” can be a combination of all salaries from all owners of the property

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What is the Debt-to-Income ratio (DTI) that lenders use?
What does a lender consider as debt?

  • This ratio is used by lenders to determine the maximum amount of mortgage you qualify for
  • The Debt-to-Income ratio is calculated by dividing your total monthly debt payments by your monthly income
  • The DTI ratio includes debt such as
    • student loans 
    • car loans/leases 
    • credit card debt 
    • lines of credit 
    • alimony payments

Your Down payment will affect your maximum house price

  • The maximum price you can pay for a house is based on your down payment + approved maximum mortgage
  • The lender will confirm your maximum mortgage amount based on the DTI ratio
  • Your down payment can come from your own savings, RRSPs, First-Time home buyer’s account, family cash-gift. Remember to keep records of where the cash came from as the lender will request this documentation


There are a lot of moving parts to figuring out how much income you need to buy a house in your city.
* How big of a house do you want?
* Do you want a fixer-upper?
* Will you buy whatever you can afford?
* Do you have the cash for the down payment?
* How much debt do you have – will these payments affect the mortgage size you need?

Talk to a Mortgage Agent.
We can break down all these issues into simple questions and answers. We’ll provide estimates, goals and a strategy to help you achieve your property goals.

Jason Wodlinger Mortgages provides estimates and explains:

  • everything about the mortgage qualification process
  • the maximum mortgage amount you will qualify for
  • how a lender would evaluate your situation
  • the probability that you will qualify for a mortgage
  • how to increase the probability that you will be approved for a mortgage
  • what your mortgage interest rate will be
  • what your total monthly mortgage payments will be
  • explain the cost related to mortgage insurance for down-payments less than 80%
  • the exact calculated result of your Debt-to-Income ratio

Let’s Connect
30 minute no obligation call

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Here are some things we’ll discuss

  • Your income
  • Your debt
  • Your employment history
  • Your assets
  • Your property goals
  • Your risk tolerance for financial decisions
  • Your timeline
  • Other questions based on the complexity of your situation
  • A conventional A level mortgage client does not pay the mortgage agent for any advice, guidance or final mortgage solution.  
  • The lender – whom the client eventually chooses – is the party that pays the mortgage agent. 
  • There are different situations in regards to clients who have less consistent or self-employed professionals.  Ask us more about this issue if you have questions.
  • There is no obligation on your part to commit to work with us.
  • We can just have a simple initial conversation to get a sense of your situation.  
  • I promise to give you the respect and privacy you deserve to take the time you need. 
  • You need to take the time to decide whether or not to use my services to help you find your new home.
  • Don’t worry if you are not ready to buy a house.  It’s never too early to start planning.  
  • Whether you are 3, 6 or 12 months away for buying, now is the time for us to meet
  • If it’s going to take you a while to save up for a down payment, you should plan very early ahead to figure out how your savings goal
  • I will answer your questions and help you set a goal that you need to reach to buy your new home.

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