Sylvie, a real estate broker in Sherbrooke, is helping her client, Marc, apply for a mortgage to purchase a duplex. Marc has an annual gross income of $75,000, and his current monthly car loan payments are $400. The estimated monthly property taxes are $300, and heating costs are $150. If the lender's qualifying interest rate for the stress test is 5.25% and the monthly principal and interest payment for the duplex mortgage is $1,800, what is Marc's Total Debt Service (TDS) ratio?

Question: Sylvie, a real estate broker in Sherbrooke, is helping her client, Marc, apply for a mortgage to purchase a duplex. Marc has an annual gross income of $75,000, and his current monthly car loan payments are $400. The estimated monthly property taxes are $300, and heating costs are $150. If the lender's qualifying interest rate for the stress test is 5.25% and the monthly principal and interest payment for the duplex mortgage is $1,800, what is Marc's Total Debt Service (TDS) ratio?

Answer options: ✅ 42.4%

• 36.0%
• 47.6%
• 51.2%

Correct answer: 42.4%

Explanation: The TDS is calculated as (P&I + Property Taxes + Heating + 50% Condo Fees + Other Debts) / Gross Income. In this case, ($1,800 + $300 + $150 + $400) / ($75,000 / 12) = $2,650 / $6,250 = 42.4%.