Those two ratios, known as GDS and TDS, decide what a lender will actually approve far more precisely than a rule-of-thumb income number does. Property taxes, heating and, for a condominium, half the monthly fee all count toward housing costs, and existing debt such as a car loan or a line of credit counts toward the total.
That is why two households earning the same income can qualify for very different mortgage amounts. A buyer with no other debt has far more room under the TDS ceiling than one carrying a car payment and a credit card balance, even at an identical salary.
A fully underwritten pre-approval turns those ratios into an exact number for your own finances rather than a general guideline. Get your hand-reviewed valuation from Joel Dyck.