Mortgages and Home Buying. You would like to purchase a house in Toronto for $1,000,000, but you are concerned you won't qualify for a mortgage because you can't pass the gross debt service (GDS) ratio test. To qualify for the mortgage, the bank requires that your GDS - which is defined as mortgage payments plus property tax plus heating costs - shouldn't exceed 35% of your pre-tax income. So, assuming that annual (i.) property taxes are 1.0% of the value of the house, (ii.) heating costs are 0.30% of the value of the house, and (iii.) mortgage rates are currently 2.5% APR, compounded monthly, if you lock-in for five years. Also, you plan to make a $150,000 down payment towards the house and will amortize the loan over 25 years. Problem: What minimum pre-tax annual salary do you need to qualify for the mortgage?