The client
A buyer under agreement on a $525,000 legal duplex in Tillsonburg, with one unit already tenanted at $1,650/mo and the second advertised on MLS as a furnished, turn-key rental.
Purchase price
$525,000, Tillsonburg
10% down, insured
Unit A (tenanted)
$1,650/mo
Documented lease; unaffected throughout
Unit B, original comparable
$1,550/mo furnished
Based on the MLS listing's advertised condition
Buyer's own income
$6,650/month
The problem
An appraiser's rent schedule prices a vacant unit against comparable rentals in similar condition -- furnished units command more than unfurnished ones, and the appraiser had priced this file's vacant unit as furnished because the MLS listing said so. What the appraiser had not checked was whether the agreement of purchase and sale's own schedule of chattels actually said the same thing.
What the marketing promised and the contract didn't
- ▸The MLS listing described the vacant unit as a furnished, turn-key rental, appliances included
- ▸The APS's own schedule of chattels never actually listed those appliances as included in the sale
- ▸The seller removed the appliances before closing -- within their rights, since the legal schedule, not the marketing copy, governs what conveys
The buyer's mortgage had already been approved counting the furnished comparable. The unit that would actually exist at closing was never going to be furnished at all.
The numbers
The mortgage payment itself never moved. Only which of two very different total-income figures the file was measured against did.
| One vacant unit, two rent comparables | Amount |
|---|---|
| Insured mortgage (unchanged throughout) | $487,148 |
| Total rental income on the original, furnished comparable | $3,200/mo |
| Total rental income on the revised, unfurnished comparable | $2,850/mo |
| Total debt service | On the furnished comparable | On the revised, unfurnished comparable |
|---|---|---|
| Payment at the qualifying rate (6.90%), 25 years | $3,382/mo | $3,382/mo |
| Property tax + heat | $505 | $505 |
| Total qualifying income | $9,850/mo | $9,500/mo |
| Total debt service | 42.3% | 43.8% |
43.8% still clears CMHC's 44% ceiling, but with far less room than the 42.3% the furnished comparable would have shown -- and the difference is entirely the appraiser's comparable basis, not any change to the mortgage itself or to Unit A's own documented lease.
The solution
A mortgage agent licensed under Ontario's Mortgage Brokerages, Lenders and Administrators Act treated the missing appliances as a change to the appraisal evidence, not a dispute to relitigate with the seller.
First, confirmed with the appraiser exactly which comparable set had been used and why. The furnished figure traced directly to the MLS listing's own wording, not to anything the appraiser had independently verified against the chattels schedule.
Second, obtained a revised rent schedule using unfurnished comparables once it was clear the appliances would not convey, rather than treating the original furnished figure as still current.
Third, resubmitted the file on the revised, lower total qualifying income of $9,500/month rather than $9,850/month, confirming with the lender that the ratios still cleared before allowing the closing to proceed on the assumption they would.
The outcome
The purchase funded insured at 43.8% total debt service on the revised, unfurnished-comparable income -- tighter than the 42.3% the original furnished comparable would have shown, but still inside CMHC's ceiling.
Because this file is CMHC-insured, both the 42.3% and 43.8% figures are measured against the real 44% ceiling; the file cleared either way, but with materially less room on the unfurnished figure.
What to take from this file
- 01An appraiser's rent comparable is only as good as the condition it assumes. A furnished-vs-unfurnished mismatch between the marketing listing and the legal chattels schedule can move the qualifying income by hundreds of dollars a month.
- 02The schedule of chattels attached to the purchase agreement controls what conveys -- not the MLS listing's own description. Confirm the two actually match before relying on either for an income projection.
- 03A change to the rent comparable is not the same problem as a change to the rent itself. Unit A's documented lease never moved; only Unit B's projected, not-yet-tenanted figure did.
- 04Check the appraisal's own comparable basis before closing, not after. A revised rent schedule obtained ahead of closing is a routine adjustment; the same discovery after funding is a much harder conversation.
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:
- ▸4.90% contract rate — rates move daily; not a quote.
- ▸the 100% rent-to-income convention used in this file's numbers — each lender publishes its own treatment for counting documented or appraised rent; there is no universal rule.
- ▸the $1,550 and $1,200 rent comparables — specific to this appraiser's comparable set at this address; not a market-wide figure.
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.