How much can you afford?
One of the first things to do when considering buying a home is to define your budget.
Initial downpayment, mortgage payments and cost of living are 3 factors to consider in your purchase project. How much can you afford?
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Your commitments
Buying a house essentially encompasses two key commitments :
1. The amount you can afford as an initial downpayment
2. The monthly mortgage payments you can comfortably carry while still enjoying life.
Defining your budget for buying a home
The table below gives you a general idea of the maximum house price you can afford. The examples are based on:
- an annual percentage rate (APR) of 8%
- average property tax and heating costs in Canada
- a 32% Gross Debt Service Ratio (GDSR)
| Household Income | 40 000$ | 60 000$ | 80 000$ |
|---|---|---|---|
| Initial 5% deposit | 5 700$ | 9 300$ | 12 500$ |
| Max. home price | 114 000$ | 186 000$ | 250 000$ |
| Initial 10% deposit | 12 000$ | 19 600$ | 27 200$ |
| Max. home price | 120 000$ | 196 000$ | 272 000$ |
| Initial 25% deposit | 36 000$ | 58 800$ | 81 500$ |
| Max. home price | 144 000$ | 235 200$ | 326 000$ |
Consider the costs
Buying a home doesn't mean stopping living to pay for it. There are two types of costs to consider:
- Additional costs associated with the purchase
- The cost of living
11 costs to consider when purchasing your home
