How Much House Can I Afford?  (Canada 2021 Mortgage Calculator)

How Much House Can I Afford? (Canada 2021 Mortgage Calculator)

Thinking of buying a house in Toronto or the 
GTA? Before you go shopping for that dream home,   you'll want to know exactly how much you 
can afford. But how do you calculate that,   especially with all the complicated mortgage 
rules? In this video I'm going to show you three   simple and easy steps to find the maximum 
purchase price for your specific needs. Victor here, and welcome to a series of videos 
that help Canadians get approved for a mortgage.   If you're new here and want to receive easy to 
understand mortgage tips, consider subscribing!   So how much house can I afford to buy? Usually 
when I'm asked that question what I'm really   being asked is, how much can I borrow for a 
mortgage? Did you know that Canadian banks follow   a series of rules and formulas to determine 
your mortgage affordability? But they're   not always easy to follow.

You could search on 
google for "mortgage affordability calculator".   Here is the problem. Most online calculators give 
different results. In fact I did an experiment.   Using the exact same scenario with 
calculators from all big six banks,   plus from four other random sites, these were the 
results. Not only were all the results different,   but the maximum purchase price also ranged 
from $295,000 all the way to $587,000! So   why the big difference and which one can I 
trust? Before you make an offer on a home,   you're going to need accurate results. There's no 
room for guessing! As the phrase goes, "knowledge   is power". But using incorrect information 
can lead to frustration and disappointment.   So here's step number one. Time to do a bit 
of homework. No excuses! It should only take   a few minutes. You'll need to collect the 
following information about your finances.   First determine your total gross annual household 
income. That is, your total income before taxes.   Next add up all your monthly payments to service 
debt. So this would include car payments, credit   card and lines of credit, student loans, child 
or spousal support, and any other debt payments.   Finally, determine what you can comfortably make 
as a down payment.

I must emphasize that you want   to be as accurate as possible to get accurate 
results. Step two. Now that you've collected   information about your finances, it's time to 
use a reliable up-to-date online calculator.   But which one? As I showed before, different 
calculators yield a huge range of results.   Why the big range? Well, it's entirely 
possible that at some point in time some of   these calculators were giving correct results. 
But mortgage rules are always changing. This   is why I designed my own calculator, ensuring to 
use the latest mortgage rules as of January 2021.   You'll get a very good idea of your maximum 
home affordability, regardless of your income   debt and size of down payment. To get to 
the calculator go to   and click on "calculators" or follow the link in 
the description below. Are you there yet? Great,   then here's a quick tutorial. The calculator 
is pre-populated with default numbers.   Simply replace them with the numbers you 
collected in step one. First enter your   down payment. For the interest rate, leave it 
as it is or change it to your desired rate.   In the next section, enter your total gross 
annual household income.


Leave the property tax,   heating costs, and condo fee as is, unless 
you know the specific costs for your property.   Next, enter all your monthly debt payments for 
credit cards, lines of credit, car payments and   any other monthly debt obligations. Scroll down 
and you'll see your results instantly! You'll see   the maximum purchase price and mortgage amount you 
can afford. In addition to that, you'll also be   given your actual mortgage payment based on your 
interest rate given at the top of the calculator,   your down payment as a percentage of the purchase 
price, and if it's less than 20 the CMHC premium   for default insurance. Finally, note the rate 
determined by the stress test.

To learn more   about that I've created a video to explain how it 
works. The link is in the description below. Now   keep in mind this is the maximum purchase price 
as determined by Canadian bank mortgage rules. It   certainly does not mean that you should go and buy 
a home at this price. You need to consider your   own financial obligations, lifestyle and spending 
habits, and what realistically works for you.   Okay, so if you're happy with the results it's 
time for step three. Getting pre-approved for a   mortgage. Why is this step so important? Because 
it will confirm how much mortgage you can afford   and give you the exact rate you qualify for. 
Besides, applying for a mortgage pre-approval   is free and doesn't commit you to any specific 
lender. But it does hold the mortgage rate you   are offered for 30-120 days. This means you're 
protected if interest rates rise while you're   shopping for a home. Have any questions? Then 
please drop a comment below. Navigating all   these mortgage rules can be complicated, but I'm 
here to help! Book your free discovery call and   we'll figure it out together.

Contact details are 
in the description below. Thank you for watching   and don't forget to subscribe. Have a 
great day and I'll see you next time!.

As found on YouTube

Looking to see what kind of mortgage you can get? Click here to see

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