Same house. Same tenant. Tens of thousands less income needed.
Many lenders add half the suite rent to the buyer's income. A rental-offset lender instead subtracts 90% of the rent from the mortgage payment, property tax and heat before calculating GDS and TDS. Enter a home below to see what that difference means for the buyer.
The Home
The Buyer
Rate & lender assumptions
Standard lender (add-back)
Rental-offset lender
| Purchase price | Down payment | ||
| Property tax / yr | Amortization | ||
| Est. suite rent / mo | Other debts / mo | ||
| Heat / mo | Buyer income / yr |
With the rental-offset lender, this buyer needs
less household income to qualify for this home.
Standard lender
| GDS | — |
| TDS | — |
Rental-offset lender
| GDS | — |
| TDS | — |
The Numbers
| Standard | Offset | |
|---|---|---|
| Mortgage amount | — | — |
| Amortization | — | — |
| Stress test rate | — | — |
| Payment at stress test rate | — | — |
| Property tax + heat / mo | — | — |
| Housing cost (PITH) / mo | — | — |
| Rent credit | — | — |
| GDS / TDS limits | — | — |
| Max purchase at buyer's income | — | — |
Why the offset method is so much stronger
Add-back: rent is added to income, which is the bottom of the ratio. At a 39% GDS, each $1 of rent added to income only makes room for about $0.39 of housing cost, and at 50% add-back that falls to roughly $0.20.
Offset: 90% of the rent is subtracted directly from the housing costs, which is the top of the ratio. Each $1 of rent removes $0.90 of housing cost.
So the same tenant is worth roughly 3–4× more to the buyer's qualification. Even a lender that added 100% of the rent to income would still fall behind a 90% offset.
