The client
A parent repurchasing in Saint John after the sale of the matrimonial home, buying a $315,000 condo with their own qualifying income of $4,500/mo from T4 employment, plus $2,500/mo in court-ordered child support under the separation agreement.
Purchase price
$315,000
Saint John condo
Own income
$4,500 / month
T4 employment
Child support
$2,500 / month
Court-ordered, under the separation agreement
Support order’s remaining term
2 years, 4 months
At the date the file was first submitted
Other debt
$210/mo
Small existing loan
The problem
On $4,500/mo of T4 income alone, the numbers did not come close to working — and the first lender approached would not count the $2,500/mo in child support at all, because the order had too little remaining term left before it would be subject to review.
Why the support income almost didn't count
- ▸The separation agreement's child-support term had 2 years and 4 months remaining at the time of application
- ▸The lender's own policy set a longer minimum remaining term before support income counts toward qualifying income at all
- ▸Below that threshold, the lender treats the income as too uncertain to rely on for the life of the mortgage being qualified
Without the support counted, GDS ran to 58.0% and TDS to 62.6% on the own income alone — nowhere near CMHC's maximums. Searching for a different lender with a shorter minimum-term policy was one option; formalizing a longer remaining term was another, and it was the one that kept the file on a mainstream insured product rather than a specialty one.
The numbers
The purchase itself never changed size. What changed was whether $2,500/mo of the applicant's income was allowed to count at all against the minimum qualifying rate — a documentation question, not a ratio question, though it decided the ratio completely.
| Qualifying, before and after the extension | Amount |
|---|---|
| Purchase price | $315,000 |
| Down payment (5%, the minimum at this price) | −$15,750 |
| Base mortgage | $299,250 |
| CMHC premium — 4.00% in the 90.01–95% LTV band, capitalized | +$11,970 |
| Total insured mortgage | $311,220 |
| Total debt service | Support not counted | Support counted |
|---|---|---|
| Income used | $4,500 | $7,000 ($4,500 + $2,500) |
| Payment at the qualifying rate (7.15% on a 5.15% contract), 25 years | $2,209 | $2,209 |
| Tax and heat | $400 | $400 |
| Other debt | $210 | $210 |
| Total debt service vs. the 44% cap | 62.6% ✗ | 40.3% ✓ |
The mortgage payment itself, $2,209 a month at the qualifying rate, never changed. Every point of the gap between 62.6% and 40.3% came from whether the $2,500 in child support was allowed to count — not from anything about the purchase itself.
The solution
An FCNB-licensed New Brunswick mortgage broker treated the remaining-term gap as the one thing standing between a declined file and an approved one.
First, confirmed exactly how much remaining term the lender's policy required before support income counts at all — a threshold set by that lender, not a published industry rule, and one the applicant's own family lawyer hadn't been asked about yet.
Second, had the family lawyer formally extend the support order's remaining term through a consent variation, rather than searching for a different lender willing to count income on a shorter-term order or trying to qualify the purchase down to what $4,500/mo alone could carry.
Third, resubmitted with the extended agreement in hand, so the $2,500/mo counted in full rather than at a partial, discounted figure some lenders apply to shorter-term support income.
The outcome & the closing math
With the support order's remaining term extended, the $2,500/mo counted in full. GDS fell to 37.3% and TDS to 40.3%, both comfortably inside CMHC's maximums, and the purchase closed insured exactly as first planned.
| Cash due at closing (beyond the down payment) | Amount |
|---|---|
| New Brunswick's flat 1% real property transfer tax on $315,000 | $3,150 |
| Legal fees and adjustments | varies |
New Brunswick's transfer tax is a flat 1% of the purchase price, with no tiers and no first-time-buyer rebate — simpler to budget for than the average mortgage payment figures most national statistics track.
What to take from this file
- 01A short remaining term on a support order can zero out the income entirely, not just discount it. Some lenders don't partially count it — they don't count it at all below their own threshold.
- 02Ask the lender's minimum remaining-term policy before assuming the income qualifies. It is set by the lender, not by a regulator, and it varies.
- 03Formalizing the agreement can be faster than shopping for a more lenient lender. A consent variation kept this file on a mainstream insured product.
- 04Confirm the fix would clear the cap before asking a family lawyer to act. Running both scenarios first meant the extension only had to happen once.
- 05New Brunswick's flat 1% transfer tax has no tiers to track. One rate, no first-time-buyer rebate, applied to the full purchase price.
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.
- ▸Real Property Transfer Tax Act, S.N.B. (via laws.gnb.ca) — New Brunswick's flat 1% real property transfer tax.
- ▸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:
- ▸5.15% contract rate — rates move daily; not a quote.
- ▸the minimum remaining term for counting support income — each lender sets its own minimum remaining term before support income counts at all.
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.