rate of 6% per annum compounded monthly. Harmonized sales tax of 13% would app

rate of 6% per annum compounded monthly. Harmonized sales tax of 13% would apply to the lease payment.

Question 1

Assume that Philip will pay down the mortgage on the cottage by the time he retires.

a) A) What will be his GDS ratio at time of purchase? (Ignore heating costs.)

b) B) What will be his TDS ratio at time of purchase? (Ignore heating costs.)

c) C) Would Philip meet institutional requirements with respect to his GDS and TDS
ratios?

D) What better way exists to assess his ability to assume the mortgage other than applying the GDS and TDS ratios? Please explain.