CMHC Ratio Calculator

Formula

To calculate the CMHC Ratio:

\[ R = \left(\frac{H}{I}\right) \times 100 \]

Where:

$R$ is the CMHC ratio (percentage)
$H$ is the total monthly housing costs
$I$ is the gross monthly income

CMHC Ratio Definition

The CMHC ratio, or Gross Debt Service (GDS) ratio, measures the percentage of a borrower’s gross monthly income that goes towards housing-related expenses. This includes mortgage payments, property taxes, heating costs, and a portion of condominium fees (if applicable). A lower CMHC ratio indicates better financial health and a higher likelihood of mortgage approval.

Example Calculation

Let's assume the following values:

Total Monthly Housing Costs (H) = $1,500
Gross Monthly Income (I) = $5,000

Step 1: Use the formula:

\[ R = \left(\frac{1500}{5000}\right) \times 100 = 30 \]

Step 2: Display the result:

The CMHC Ratio (R) is 30.00%.