Here are the qualifications variances between lenders:
(For Mortgage Brokers and Bankers: 50% add back = 20% offset + 100% add back = 40% offset)
Percentage of Basement Suite Income Used
20% basement suite income used
40% basement suite income used
80% basement suite income used
85% basement suite income used
This list is for fixed rate mortgages and not variable mortgages.
Here is how we will break down the list:
1. Calculated based on posted rates = BAD <Details Here>
2. Calculated based on discounted rates = GOOD (no penalty is ever good)
I recently had a client pay a $13,000 break fee on a 2 year old mortgage from a leading Canadian Bank. As you can imagine the client was not impressed. By factoring in an extra $13,000 penalty, the real interest rate went from 3.49% to 5.65%.
So what's the deal?