Mortgage Affordability Calculator Canada

When browsing real estate listings for a new home,

When browsing real estate listings for a new home,

The first step is to see how much you can afford. Affordability is based on the household income, and the expenses associated with owning a home ). The calculator below you can qualify for.

You also need to determine if you have enough cash resources to purchase a home. The cash required is charged to the purchase price, and is required to be charged to the purchase. Anne Shirley.ca can help you get a better understanding of how much money you can afford.

Affordability

Cash Needed How much extra cash will I need when my house closed?

When you buy a house, there is a number of costs that you will need to pay down. These costs depend on a number of factors that make you feel like home (ie house vs. condo) and where the home is located.

Our tool will help you, you know how much you’ll need to save.

Type of home: House Condominium

Required Cash Expenditures

Scenario: Max. Affordability Build Your Own

  • Down payment $ –
  • PST on mortgage insurance $ –
  • Land Transfer Tax $ –
  • Lawyer fees $ –
  • Title insurance $ –
  • Estoppel certificate fee $ –
  • Total Cash Required $ –

Other Cash Considerations

  • Home inspection fees $ 300 – $ 500
  • Appraisal fees $ 300

Monthly Expenses Can I pay my monthly expenses & mortgage payments?

expenses

Scenario: Max. Affordability Build Your Own

  • Mortgage payment $ –
  • Property Tax $ –
  • Monthly Debt Payments $ –
  • Utilities $ –
  • Condo Fees $ –
  • Property insurance
  • Phone
  • Cable
  • Internet
  • Total $ –

Interest Rate Risk What would my payment be at higher interest rates?

When determining the size of your home, it is important to look at the long term horizon. The mortgage rate you pay today could be substantially different from the mortgage rate.

The calculation below shows how much of your mortgage principal will be left at the end of the term.

Mortgage Amount

Scenario: Max. Affordability Build Your Own

  • Mortgage amount today $ –
  • Less: Principal paid off over term $ –
  • Mortgage remaining at end of term: $ –

Using this amount, we calculate the corresponding mortgage payments

Below is a graph that displays the values ​​of competitive 5-year fixed mortgage rates since 2006.

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How to estimate affordability

How to estimate affordability

Lenders look at two ratios when determining the mortgage amount you qualify for, which indicates how much you can afford. These ratios are called the Gross Debt Service (GDS) ratio and the Total Debt Service (TDS) ratio. They take into account your income, monthly housing costs and overall debt load.

Mortgage and Housing Corporation (CMHC), Canada Mortgage and Housing Corporation (CMHC), Primary Mortgage and Housing Corporation (PTH) – should not exceed 32% of your gross monthly household income . For condominiums, PITH also includes half of your monthly condominium fees. The sum of these cases is a percentage of your gross monthly income is your GDS ratio.

The CMHC’s second affordability rule is that of your total monthly debt load, including housing costs, should not be more than 40% of your gross monthly income. In addition to housing costs, your total monthly debt load would include. The sum of your total monthly debt load as a percentage of your gross household income is your TDS ratio.

Gross Debt Service Ratio = Mortgage Principal & Interest + Taxes + Heating Expenses Annual Income Ratio should be <32% Total Debt Service Ratio = Housing Expenses + Credit Card Interest + Car Payments + Loan Expenses Annual Income Ratio should be <40%

Note that while the industry guideline for GDS and TDS is 32% and 40% respectively, most borrowers with good credit and steady income will be allowed to exceed these limits. The maximum allowed is 39% and 44%. The calculator uses these maxima to estimate affordability.

Down Payment

Down Payment

Your down payment is a benchmark used to determine your maximum affordability. Ignoring income and debt levels, you can determine how much you can afford to spend using a simple calculation:

  • If your down payment is $ 25,000 or less, you can find your maximum purchase price using this formula: down payment / 5% = maximum affordability.
  • If your down payment is $ 25.00 or more, you can find your maximum purchase price using this formula: $ 25,000 / 10% + $ 500,000 down payment amount. For example, if you have saved $ 50,000 for your down payment, the maximum price would be $ 50,000 – $ 25,000 = $ 25,000 / 10% = $ 250,000 + $ 500,000 = $ 750,000.

Any mortgage with less than a 20% mortgage is usually a mortgage, and you need to purchase a mortgage.

Cash requirement

In addition to your payment, you need to pay 1.5% – 4% of your home rental price, which is payable on closing day. Many home buyers forget to account for their costs in their cash requirement.

Other mortgage qualification factors

Other mortgage qualification factors

In addition to your debt service ratios, down payment, and cash for closing costs, you will also consider your credit history and your income when qualifying for a mortgage. All of these factors are equally important. For example, if you have good credit, you have a debt, you have a loan, you have a loan.

Keep in mind that the mortgage affordability calculator can only provide an estimate of how much you will be approved for, and assumes you’re an ideal candidate for a mortgage. To get the most accurate picture of what you are saying to a mortgage broker about getting a mortgage pre-approval.

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