The client
A couple buying in Swift Current, Saskatchewan, with steady combined income and one complication that had nothing to do with the property: an active wage garnishment on one applicant's paycheque, under a small-claims judgment from an unrelated, years-old dispute over a contractor invoice.
Borrowers
Combined income $6,400/month
Both salaried, stable employment
Purchase
$245,000, Swift Current
Property tax $215/mo; lender heat estimate $100/mo
Small-claims judgment
$6,800, unrelated to the property
From a years-old contractor-invoice dispute
Wage garnishment
$650/month, active
Deducted directly from one applicant's paycheque
Other debt
$260/mo car loan
the only other item on either bureau file
The problem
A wage garnishment is not a lien on the property being purchased and has no connection to it — it attaches to income, under a judgment from an entirely separate matter. But a lender still has to count what it actually costs the household every month, and an active garnishment on file reads as an unresolved stability question well beyond the ratio math alone.
What the garnishment added to the file
- ▸Judgment balance: $6,800, from a contractor-invoice dispute with no connection to the purchase
- ▸Monthly garnishment deduction: $650, taken directly from the paycheque
- ▸Total debt service with the garnishment counted: 45.1% — over CMHC's 44% maximum
Beyond the ratio itself, an active garnishment tends to read to underwriting as evidence of an unresolved financial dispute, regardless of how the surrounding numbers land. A file that clears on the math with the garnishment still open is not the same, in a lender's eyes, as a file where the underlying problem has actually been closed out.
The numbers
GDS, unaffected by either the judgment or the garnishment, was comfortable throughout. The entire question sat inside total debt service — what to do about a single $650/mo deduction that had nothing to do with the mortgage itself.
| The insured loan | Amount |
|---|---|
| Purchase price | $245,000 |
| Down payment (5%, the minimum at this price) | −$12,250 |
| Base mortgage | $232,750 |
| CMHC premium at 4.0% (90.01–95% LTV band) | +$9,310 |
| Total insured mortgage | $242,060 |
| Total debt service | With the garnishment | After the judgment is paid out |
|---|---|---|
| Housing costs (payment + tax + heat) | $1,979 | $1,979 |
| Car loan | $260 | $260 |
| Wage garnishment | $650 | — |
| Total debt service | 45.1% ✗ | 35.0% ✓ |
GDS on its own, using housing costs alone against the $6,400/mo combined income, worked out to 30.9% — well inside CMHC's 39% maximum, and never affected by the garnishment. The $650/mo deduction was the entire gap between a declined file and an approved one.
The solution
A mortgage broker licensed under Saskatchewan's Financial and Consumer Affairs Authority (FCAA) resolved the underlying judgment directly, rather than arguing the ratio math with an active garnishment still on file.
First, confirmed the exact judgment balance directly with the court file — the same discipline behind reading the credit bureau like an underwriter rather than taking a client's own account of a debt at face value. $6,800 owing, unrelated in any way to the property being purchased or to either applicant's mortgage history.
Second, had the client pay out the judgment in full from savings kept explicitly separate from the down payment — making sure the funds used to close out the garnishment never touched the money already earmarked and seasoned for the purchase.
Third, obtained written confirmation that the garnishment order had been lifted before resubmitting the file, rather than assuming a payment receipt alone would be enough — a lender wants to see the deduction actually stopped, not just paid toward.
The outcome
With the judgment satisfied and the garnishment lifted, total debt service settled at 35.0% and the file closed on the same price, down payment and income first submitted — once resolved, the garnishment left no trace on the file's debt-service math at all.
Saskatchewan has no provincial land transfer tax; ISC's own land-titles registration fees applied at closing, but the current fee schedule could not be independently confirmed, so no dollar figure is given here.
What to take from this file
- 01A wage garnishment is unrelated to the property, but still counts against the file. It attaches to income under a separate judgment, and a lender has to price its real monthly cost regardless of what caused it.
- 02An active garnishment reads as a stability flag, not just a ratio line. Resolving it outright tends to matter more to underwriting than simply absorbing its cost in the math.
- 03Pay out the judgment from funds kept separate from the down payment. Protecting the seasoned, documented down-payment funds avoided reopening a second question while resolving the first.
- 04Get written confirmation the garnishment order was actually lifted, not just that the judgment was paid. A lender wants to see the deduction stopped, not merely being paid down.
- 05GDS and TDS can diverge sharply around a single debt. Confirming GDS was untouched kept the entire fix focused on the one number that actually needed it.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸4.79% contract rate — rates move daily; not a quote.
- ▸the $6,800 judgment and $650/mo garnishment figures — illustrative anonymized figures; judgment and garnishment amounts are file-specific.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.