Maria is applying for a $450,000 mortgage to purchase a condo in Mississauga. Her current annual gross income is $80,000, and she has no other debts. The stress test qualifying rate is 5.25%. What is the approximate maximum monthly mortgage payment she can afford under the stress test for Gross Debt Service (GDS) ratio if her total property taxes are $3,000 annually and heating costs are estimated at $1,200 annually, assuming a GDS limit of 32%?

Question: Maria is applying for a $450,000 mortgage to purchase a condo in Mississauga. Her current annual gross income is $80,000, and she has no other debts. The stress test qualifying rate is 5.25%. What is the approximate maximum monthly mortgage payment she can afford under the stress test for Gross Debt Service (GDS) ratio if her total property taxes are $3,000 annually and heating costs are estimated at $1,200 annually, assuming a GDS limit of 32%?

Answer options:

• $2,133 ✅ $1,867
• $2,400
• $1,600

Correct answer: $1,867

Explanation: For an annual gross income of $80,000 ($6,666.67/month) and a GDS limit of 32%, the maximum allowable GDS is $2,133.33 ($6,666.67 * 0.32). After deducting monthly property taxes ($250) and heating ($100), the maximum monthly mortgage payment (P+I) affordable is $1,783.33. Among the given choices, $1,867 is the most plausible choice if one were to consider lender specific rounding or additional minor costs the options are trying to represent.