homeownership debt service

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The Wealthy Homeowner™ decides how much home they can afford to own by using Homeownership Debt Service (HDS) instead of Gross Debt Service (GDS) or Total Debt Service (TDS) that banks and real estate agents use each day in order to convince Canadians to buy constantly bigger and more expensive homes.  

When interest rates were above 9.5% both GDS and TDS were actually a safe way of making a home owning decision because when rates are high only the smallest of mortgage debt gets approved resulting in a more affordable home being the only viable option.  When interests begin to fall below 9% GDS and TDS start allowing larger and larger mortgage debt to be assumed and a disproportionately more expensive home to be approved for owning.  

HDS on the other hand is the only consistent measure of affordability no matter where, when and under what interest rates conditions a home buyer is considering buying under.
 
The Wealthy Homeowner™ understands their ability to own any home means meeting the full costs of homeownership which will eventually determine whether their homeownership experience improves their lifestyle or hinders it.  Homeownership Debt Service (HDS) measures the amount of disposable income that will be required to pay all your costs of homeownership.  The Wealthy Homeowner™ knows that when interest rates fall low enough bank approved GDS ratios actually encourage you to buy homes where often over 100% of your disposable income would be required to go towards meeting your full homeownership costs. Using HDS stops that from happening while protecting your finances and family all at the same time. 

Most Home buyers today are never told that even when the average Canadian home is owned mortgage-FREE the homeowners will still pay over $1500 of monthly expenses to keep owning it. Why not use HDS to make the most knowledgeable and prudent home buying decision and let it assist you in becoming
​The Wealthy Homeowner™. 

what is HDS

Homeownership Debt Service (HDS)  measures the total costs of owning a home and compares that against your take home pay.  Just like a landlord or commercial investor always budgets for known expenses HDS does this for a regular homeowner. The costs can also be called the Real Cost of Owning a home and only by knowing and including those costs can a responsible and prudent decision be made on how much home you can really afford. HDS includes mortgage payments, property taxes, property insurance, utilities, maintenance, repairs and renovations. HDS then compares those costs against the owners after tax income ensuring a real understanding of how much money will be left over when all homeownership costs are paid.

ownership costs

The real monthly cost of owning a home is equal to the total of all home financing payments, property taxes, house insurance, natural gas, hydro, water and your monthly contribution to a 25 year maintenance/replacement/renovation budget.
(Where condo fees partially offset the maintenance, repairs, and renovation costs, the offset would be deducted in kind.)    

why HDS

Homeownership Debt Service (HDS) is the most reliable measure of a prospective home owners financial ability to own a home.  No matter the interest rate environment or the type of home you might buy or which province you decide to purchase in HDS covers them all.  HDS is the only consistent measure of any Canadian's ability to own a home anywhere in Canada.
All other measures create a false conclusion because they are designed to encourage acquiring the most home possible irregardless of your ability to afford it.

after tax income

Depending on which province you live the amount of after tax income you are left with at year's end varies greatly.  Basic exemptions and benefits vary from province to province and can make a major difference in how much home you really can afford. Where GDS and TDS ignore provincial differences in what income taxes you are required to pay, HDS includes that important difference.
A full and professionally completed HDS takes your unique situation into account and presents an accurate measure of how much home your personal situation shows you can really afford to own.

about H.D.S.

Homeownership Debt Service (HDS) was first introduced in 1982 when mortgages were set to renew at rates in excess of 20%. HDS was first used to determine the ability of current homeowners to weather 3 years of homeownership costs at historically high interest rates.  A decade later as rates were falling below 10% on 5 year terms, HDS began to be used to prevent the over-purchase of homes instead of relying solely on maximum purchase price approvals tied exclusively to GDS (Gross Debt Service) and TDS (Total Debt Service).  HDS was created by the founders of Ross Kay Realty Consultants and has served to empower thousands of Canadian homeowners over the last 30 years. Not a single Canadian family has lost a home or been unable to navigate the costs of owning a home when prudently following HDS guidelines.
The cumulative 100,000 years of homeownership experiences currently part of our research suggests, HDS should fall between 50-60% and is contingent upon the amortization period of choice.