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Case Study · Residential / Prime

Two Modest Incomes and a TDS of About 47%: A Major Bank Financed a Second Rental Condo at About 78% in Langley

A married couple who already owned a rental in Chilliwack were buying a one-bedroom condo in central Langley as a second rental, valued at $490,000.

Closed in 2022 · Published October 19, 2026

  • Residential
  • Prime lender
  • Purchase
  • Investment property
  • Rental
  • Equity take-out
Value
$490,000
Mortgage
$380,000
Loan-to-value
about 78% of the value
Income used
about $50,000 and about $41,000, plus rent of $3,000 a month and about $1,900 expected from the condo
Rate in 2022
3.60% (prime less 0.10%), five-year adjustable, qualified at 5.60%

The Situation

A married couple who already owned a rental in Chilliwack were buying a one-bedroom condo in central Langley as a second rental, valued at $490,000.

The Challenge

Their incomes were steady but modest: about $50,000 as a delivery driver since 1985 and about $41,000 as a paralegal since November 2014. Even counting the Chilliwack home's appraised market rent of $3,000 a month and about $1,900 expected from the condo, the total debt-service ratio came to about 47%, above the usual 44% limit.

The Solution

In 2022 we placed $380,000 with a major Canadian bank's rental program, about 78% of the value, at 3.60% (prime less 0.10%) on a five-year adjustable term, qualified at 5.60%. Scores of 783 and 840 on very thick credit, every account paid as agreed, carried the total ratio of about 47%, with the condo's rent to be confirmed by appraisal.

The Outcome

The $110,000 down payment came from refinancing the Chilliwack rental with the same bank in May 2022.

Run the numbers

Affordability Calculator

A second rental bought on two modest incomes with the rents counted. See what your own income, debts and down payment 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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Get your real mortgage approval amount

Every file is different — rental addbacks, lender exceptions, and alternative-lender stretch policies vary case by case. We'll run your exact scenario and tell you precisely what you qualify for.

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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 a bank accept a total debt-service ratio of about 47%?+

Under its rental program, on a strong file. In this 2022 file the total ratio came to about 47%, above the usual 44% limit, and scores of 783 and 840 on very thick credit, every account paid as agreed, carried it.

Does rent from the properties count toward qualifying?+

Yes. In this 2022 file the Chilliwack home's appraised market rent of $3,000 a month and about $1,900 expected from the condo were counted, with the condo's rent to be confirmed by appraisal.

Can a refinance fund the down payment on a second rental?+

Yes. In this 2022 file the $110,000 down payment came from refinancing the Chilliwack rental with the same bank in May 2022.

What rate did the mortgage carry?+

3.60% on a five-year adjustable term. In this 2022 file that was prime less 0.10%, qualified at 5.60%, on $380,000 at about 78% of the value.

Can modest incomes carry two rentals?+

They did here. In this 2022 file incomes of about $50,000 as a delivery driver since 1985 and about $41,000 as a paralegal since November 2014 carried the purchase.

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