What can you afford?
You’ve probably heard the expression “house-poor” from someone who recently bought their first home. It means they can afford to live in their new house, but that’s all. They have nothing left over at the end of the month. This is an unfortunate situation that can be avoided by planning ahead and working with a qualified Mortgage Specialist.
The chart below will help you estimate the size of the mortgage you can comfortably afford to carry, based on your financial situation at this time. These calculations are based on years of experience in helping Canadians buy their first home. Time after time buyers who follow these guidelines find home ownership easier, less stressful and a lot more comfortable.
- Your annual Salary (before income taxes)
- Your spouse’s annual salary, if applicable (before income taxes)
- Other Income
- Multiply (D) “Total Income” by 2.4 to get the approximate size of mortgage you can afford ($ _______________ x 2.4)
- For a home purchase, determine the money you have for a down payment (including your deposit)
- Add your amount of potential mortgage (E) to your own down payment (F) to help you assess the home purchase price you can afford (E+F)
Note: Any fixed expenses may reduce the amount you can afford.
You can calculate your monthly payments, based on the mortgage amount above, by visiting www.tdcanadatrust.com and clicking on the easy–to-use Mortgage Calculator. You’ll also find current rates and many other online planning tools.