Dominion Lending CentresDLCG · #1 for new mortgages · $84.5B in 2025
Case Study · Residential / Prime

A New Business With No Tax Return Yet and Ratios of About 49%: A Major Bank Financed a First Townhouse at 80% in Coquitlam

A married couple with no debt were buying their first home: a Westwood Plateau townhouse in Coquitlam with three bedrooms, a den and a double garage, priced at about $1.2 million.

Closed in 2025 · Published October 18, 2026

  • Residential
  • Prime lender
  • Purchase
  • First-time buyer
  • Self-employed
  • Coquitlam
Purchase price
about $1.2 million
Mortgage
about $950,000
Loan-to-value
80% of the price
Debt-service ratios
about 49%
Rate in 2025
4.49%, three-year fixed, 30-year amortization

The Situation

A married couple with no debt were buying their first home: a Westwood Plateau townhouse in Coquitlam with three bedrooms, a den and a double garage, priced at about $1.2 million.

The Challenge

One spouse, a senior data scientist nine years in the field, earned about $150,000 with bonus. The other left a salaried UX research job in August 2024 for a sole proprietorship in the same work, bringing 2024 to about $60,000, but no return could be filed before the January closing.

The Solution

In 2025 we placed about $950,000 with a major Canadian bank, 80% of the price, on a three-year fixed term at 4.49% with a 30-year amortization, qualified at 7.95%. We asked the bank to count about $40,000 a year for the new business, two-thirds of the year's total; scores of 823 and 805 carried ratios of about 49%, above the usual 44%.

The Outcome

The couple bought their first home with 20% down, about $240,000, from savings and investments.

Run the numbers

Affordability Calculator

A first townhouse bought with one spouse's new business not yet on a tax return. See what your own down payment and income support.

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Income & debts
Monthly liabilities

How lenders count these: car loan = actual payment; credit cards + unsecured personal LOC = 3% of balance each; student loan = 1–1.5% of balance even on a $0 plan.

Mortgage terms
Amortization
Term
Rate type
Housing carrying costs (monthly)

Heat: CMHC standard $100/mo. Condo: only 50% counts toward your housing ratio.

Max purchase price
$738,567
$638,567 mortgage + $100,000 down · limited by down payment
Total monthly debt (stress-tested)$4,550

Qualified at 6.50% (OSFI B-20 stress test).

Two ways to buy

Same income, same down payment — two strategies. Insured pricing assumed ~0.25% below conventional.

Conventional
20% down (uninsured)
$500,000
Down: $100,000 (20.0%)
Mortgage: $400,000
Rate assumed: 4.75%
Monthly payment
$2,075/mo
Principal & interest at 4.75% over 30-yr amort
Saves $19,796 in CMHC premium
− Extra interest @ +0.25% over 5-yr term: $4,750
Est. net savings: $15,046

Limited by 20% down rule — extra income capacity is unused.

Insured
Less than 20% down (CMHC-insured)
$738,567
Down: $100,000 (13.5%)
Mortgage: $638,567
Rate assumed: 4.50%
Monthly payment
$3,320/mo
Principal & interest at 4.50% over 30-yr amort
+ CMHC premium: $19,796 (financed)
Total loan w/ premium: $658,363
30-yr insured amort (first-time buyers / new builds only) adds a 0.20% premium surcharge — not included above.

Limited by income — your cash covers more than the minimum down at this price.

What this calculator does that most don't
  • Models liabilities the way lenders actually do: credit cards at 3% of balance, student loans at 1–1.5% of balance even on $0 payment plans
  • A multi-property builder that applies 100% rental add-back to income and full carrying costs to TDS — portfolio buyers get real numbers
  • Compares insured vs conventional side by side, netting the CMHC premium saved against the extra interest of the higher conventional rate
  • Discloses the exception ratios brokers actually place files at: A-lenders to 50/50, alternative lenders to 60/60 — numbers no bank calculator will print
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Contract vs stress-test payment

Lenders qualify you on the taller bar — even though you actually pay the shorter one. That's the OSFI B-20 stress test in one picture.

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Exceptions — you may qualify for more▾
  • • Conventional (A-lender) — strong files: as an exception, may be considered up to 50% / 50% GDS / TDS.
  • • Alt-lender (minimum 20% down): up to 60% / 60%, and even higher at ≤65% LTV.
  • • Insured deals (< 20% down): hard capped at 39% / 44% — no exceptions.

This calculator shows the standard 39/44 case. Exceptions depend on file strength and lender — get in touch to find out your true qualification.

Questions and answers

Questions about this file

Can new self-employed income count before a tax return is filed?+

It can, in part. In this 2025 file one spouse had left a salaried UX research job in August 2024 for a sole proprietorship in the same work, and we asked a major Canadian bank to count about $40,000 a year for the new business, two-thirds of the year's total of about $60,000.

Can debt-service ratios go above 44%?+

Yes, with strong credit. In this 2025 file scores of 823 and 805 carried ratios of about 49%, above the usual 44%.

Why couldn't the new business show a tax return?+

Because of the timing. In this 2025 file the new business brought 2024 to about $60,000, but no return could be filed before the January closing.

What rate was the mortgage qualified at?+

7.95%. In this 2025 file the mortgage of about $950,000 was on a three-year fixed term at 4.49% with a 30-year amortization, qualified at 7.95%.

Where did the down payment come from?+

Savings and investments. In this 2025 file the couple bought their first home with 20% down, about $240,000, from savings and investments.

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