If you’ve been dreaming of owning a home in beautiful Victoria but still have student loan debt, you’re not alone. Many first-time buyers face the same challenge, and the good news is, yes, you can absolutely buy a home with student loan debt—as long as you understand how your finances affect mortgage approval.
The Key Factor: Your Debt-to-Income Ratio (DTI)
When lenders assess your mortgage application, they look closely at your debt-to-income ratio (DTI). This number compares your total monthly debt payments (including student loans, car payments, and credit cards) to your gross monthly income.
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A good target is a DTI of 43% or lower, which most lenders in Canada consider manageable.
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For example, if your monthly income is $6,000, your total monthly debt—including your mortgage—shouldn’t exceed about $2,580.
What About Student Loans?
Your student loan payments are factored into your DTI, so reducing them can improve your chances of qualifying for a mortgage. Here are a few tips:
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Explore Federal or Provincial Repayment Programs
Canada offers various repayment assistance plans for student loans. You may qualify for lower monthly payments or temporary relief, freeing up room in your budget. -
Consider Deferment or Consolidation
If you’re eligible, deferring your student loan or consolidating it into a lower-interest option can make your monthly obligations more manageable. -
Work on Other Debt
Paying down credit cards or car loans can help lower your overall DTI, making you a stronger candidate in the eyes of lenders.
Why Victoria Buyers Need to Plan Carefully
Victoria’s real estate market is competitive, with limited inventory and high demand. This means getting pre-approved with a solid financial plan is crucial. Even with student loans, you can still buy, but being strategic with your budget and loan management is key.
Next Steps
If you’re ready to take the first step toward homeownership in Victoria—even with student loans—we can help you navigate your options and connect you with trusted mortgage professionals.
📲 Contact us today for personalized guidance on finding your dream home in Victoria!
