|
|
 |
 |
|
- Calculate
Your Gross Debt Service Ratio (GDS).
"Most lenders say that your monthly housing expenses
(principal, Interest, and taxes) should not exceed
30% of your family income (before personal income
taxes)."
-
Take your total monthly gross (before tax)
income. |
$
____________________ |
| Multiply
it by the maximum GDS Ratio (30%). x .30 |
$
____________________ |
This
is the maximum amount available for your
mortgage payment (principal and interest),
property taxes, and 50% of condo fees (if
applicable). |
$ ____________________ |
| Example:
Fred and Wilma have a gross family income
of $ 66,000. per year, or $ 5,500.
per month. No more than $ 1,650.
( $ 5,500. x 30% ) can be applied to
housing expenses. |
|
 |
|
Calculate
Your Total Debt Service Ration (TDS):
"Your TDS takes into account monthly housing expenses
plus other debts and loans you may have."
To
calculate your Total Debt Service Ratio (TDS):
| Take
your monthly gross (before tax) income. |
$
____________________ |
| Multiply
it by the maximum TDS Ratio (40%). x .40 |
$
____________________ |
Subtract
your regular monthly expenses
(e.g. credit cards, car payments, personal loans). |
$ ____________________ |
This
is the maximum amount available for your
mortgage payment, property taxes,
and 50% of condo fees (if applicable). |
$ ____________________ |
| Example:
Fred and Wilma have a gross family income of $
66,000. per year or $ 5,500. per month.
They also have two car payments totalling $
575. per month, a student loan of $ 150.
per month, and credit card payments of $ 175.
per month. They can apply no more than $ 1,300.
of their monthly income to housing costs ($
5,500. x 40% = $ 2,200. - $ 900. = $ 1,300.). |
|
 |
|
Calculate
the amount available to apply to your monthly mortgage
payment. "This figure will be used to calculate how
much mortgage you are eligible for."
To
calculate this amount:
| Identify
the lower of your GDS or TDS: |
$
____________________ |
| Subtract
an approximate amount for property tax. |
$
____________________ |
This
is the amount we will now use to calculate how
much
mortgage you are eligible for. |
$ ____________________ |
|
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|
- Determine
The Purchase Price You Can Afford.
- Using
the figure calculated in Step 3, find the closest
matching number in column A (see below).
- The
corresponding number in column B (see below)
is your approximate eligible mortgage amount.
- In
column C (see below) record the down payment
amount that you have available.
- In
column D (see below) add the numbers identified
in column B + C together.
This
approximately equals the price of the home that
you can afford. In the example of Fred and Wilma,
the amount calculated in Step 3 was $
1,125. They also have saved a down payment of
$ 30,000. With a monthly payment of $
1,125. (refer to column A) they are eligible
for an approximate mortgage of $ 130000.
(refer to column B). With their down payment
of $ 30,000., they can afford to buy a home
worth approximately $ 160,000.
A
MONTHLY PAYMENTS
|
B
ELIGIBLE AMOUNT OF MORTGAGE
|
(cost
includes principal and interest per month
based on interest rate of 10% and 25 year amortization)
|
$
269.
|
$
30,000.
|
|
$
358.
|
$
40,000.
|
|
$
448.
|
$
50,000.
|
|
$
537.
|
$
60,000.
|
|
$
626.
|
$
70,000.
|
|
$
716.
|
$
80,000.
|
|
$
805.
|
$
90,000.
|
|
$
895.
|
$
100,000.
|
|
$
984.
|
$
110,000.
|
|
$
1,074.
|
$
120,000.
|
|
$
1,163.
|
$
130,000.
|
|
$
1,253.
|
$
140,000.
|
|
$
1,342.
|
$
150,000.
|
|
$
1,432.
|
$
160,000.
|
|
$
1,521.
|
$
170,000.
|
|
$
1,610.
|
$
180,000.
|
|
$
1,700.
|
$
190,000.
|
|
$
1,789.
|
$
200,000.
|
C
DOWN PAYMENT AVAILABLE
+ ____________________
|
D
HOUSE PRICE YOU CAB AFFORD
= ____________________
|
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|
Don't
forget that the down payment must be at least 10% of
the purchase price of the home, unless you qualify for
Canadian Mortgage and Housing Corporation's (CMHC) 5%
down program for first-time buyers.
Please note that all amounts are approximate. Columns
A & B are based on an interest rate of 10%. Rates do
vary. If rates are higher, you would be eligible for
a smaller mortgage. If rates are lower, your mortgage
could be higher.
These calculations do not take into account mortgage
insurance premiums for high-ratio mortgages.
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