Can I afford this mortgage? Here’s how much you can safely borrow to buy your first home

“,” address “:” “,” fullWindow “:” fullBleed “:” fullBleed “,” showFullBleedOnMobile “,” headColor “:” “,” type “:” html5mobile “,” textColor “:” “,” mobileImageUrl “:” bgColor “:” imageUrl “:” RegisterOnly: false, linkUrl “:” aodaTitle “:” internalScroll: false, “displayStyle”: “small-up”}, {“text”: “You can find a debt service calculator on the CMHC website where you can run some numbers.”, “type”: “text”, “isParagraph”: true, “isHeading” : false }, {“type”: “ad”, “title”: “ARTICLE CONTINUES BELOW”, “name”: “ArticleSecondBigBox”, “display”: “medium-down”, “pos”: “2”, “Penny” : true, “sizes”:[[300,250]]}, {“text”: “To give you an idea of ​​how much you can borrow, we asked Leah Zlatkin, a mortgage broker at LowestRates.ca, to calculate a typical mortgage amount for a first-time buyer who earns $100,000 a year.”, “type”: “text”, “isParagraph”: true, “isHeading”: false }, {” type “:” articleRelatedInlinePrimary ”}, {“ text “:” If you have a fixed five-year mortgage rate of 3.25 percent, you must be Capable of handling a mortgage with a “stress test” rate of 5.25 percent, she says. That would qualify you for a mortgage of about $528,000. Every quarter of a percentage point above the stress test rate would equal about $12,000 less in financing. “,” type “:” text “,” isParagraph “,” isHeading “: false } , {” text “:” With a down payment of $30,000, this means that you can afford a house that costs about $560,000.”,” type “:” text “,” isParagraph “,” isHeading “,” false}, {” type “:” textBreakPoint “,” insertAt “:” contentEndBreakPoint “}, {” text “:” The reality is even many professionals people with income For seniors, including doctors and law rs, you can’t buy real estate in Toronto, says Heath. That is why many are looking for homes outside the city, and are considering creating smaller apartments or providing a larger down payment. “,” type “:” text “,” isParagraph “,” isHeading “,” false }, {” type “:” stn-smart-player “}, {” type “:” cta “,” buttonText”: “Sign up now”, “buttonLink”: “/ newsletters-signup.html? nsrc = article-inline-default”, “description”: “Don’t miss the latest news from the Peterborough Examiner. Subscribe to our email newsletter to get daily top stories, your favorite columnists, and more in your inbox. “,” title “:” Get more Peterborough Examiner in your inbox “,” text “:” Clarrie Feinstein is a Toronto-based reporter for The Star. You can reach Clarrie via email: clarriefeinstein@torstar.ca “,” author “,” author “:” Clarrie Feinstein “,” photo “,” origImageSize “:” 2483×3262 “,” lastmodified “: 2700061000 , “url” “:” /content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”,”sizes”:{“1:1”:{“small”:”https://images.thestar.com/DN2xUqBjcKY1PO4l_lL3Mp5Ps-sart=/100 https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”},”3:2″:{“small”:”https://images.thestar.com/Yqw_qUoILjnPNSDezsnqugq76/smart/ https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”,”medium”:”https://images. //www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”,”large”:”https://images.thestar.com/xTYn5Ue8cQQcgq0e9e4tWa3I8bE=/690x .com/thestar/content/columnist / Feinstein_Clarrie_logo20 22.jpeg “},” 21:9″: {“large “:” https://images.thestar.com/acmbJL4ZnCcH8dbg2m7HgglZ1E4=/1080×460/smart/https://www.thepeterboroughexaminer.com/content/dam /thestar /columnist_logos/Feinstein_Clarrie_logo2022.jpeg”}}},”location”:”Toronto”,”tag”:”feinstein_clarrie”,”credit”:”Staff Reporter”,”twitterId “:” ClarrieF”,”email”: “clarriefeinstein” @torstar.ca “},” authorPageUrl “:” https://news.google.com/authors.feinstein_clarrie.html “,” type “:” endnote “,” isLast”: true}, {” type “:” relatedStories “,” relatedStories “:[]}, {“type”: “articleRelatedFooter”}, {“type”: “shareBar”, “position”: “bottom”}, {“type”: “trustbar”}, {“type”: “Conversations”}]Asset tags:[“feinstein_clarrie”,”mortgage_broker”,”economy”,”real_estate”,”in_your_corner”,”InHouseArticle_thestar”,”mortgage”,”savings”,”debt”,”finances”,”smg_personal_finance”,”arc_cov_recovery”,”uk_mortgage_terminology”,”mortgage”,”mortgage_loan”,”canada_mortgage_and_housing_corporation”,”buying_property”,”money”,”kmi2″,”jason_heath”,”smg2_business”,”nicrt1″,”finance”,”arc_cov_economy”,”algolock”]”seoKeywords”: “Arc cov economy, arc cov recovery, in your corner, mortgage, real estate, buy property, finance, save, NICRT1, KMI2, smg_personal_finance, smg2_business, InHouseArticle_thestar, algolock”, “extracteInRecommendations”: false, ” Promo “:[], “tier”: “tier1”, “related”: {“pubdays”: 0}, “Strategy”: 0}, “personalizationMetadata”: {“Subsection”: “Personal Finance”, “description”: “Talk to a mortgage” Realtor and make a personal assessment of the budget before starting the search for a home, expert says. “,” hasImage”: true “,” section “:” Business “,” asset_id “:” 64350ea6-20a4-44e8-8f79-3b42f13cd988 “,” title “:” Can I afford this mortgage? Here’s how much you can safely borrow to buy your first home “,” Type “:” article “,” thumbor_image “:” {\”imageid\”:\”GK81GM2T6.3\”,\ “origImageSize”: “1200×803”, “cropthumb”: “0,0,1200,800”, “lastmodified”: 1650881088620, “fullWindowMainart”: false, “forceoriginal” : false, \”cap\”: \”Before getting into the real estate market, Jason Heath suggests meeting with a mortgage broker or professional to do a personal assessment of all your costs to assess your budget and see how much you can borrow. \ “, \”source\”: \”TNS\”, \”type\”:\”image\”, \”credit\”: \”Valentin Armianu\”, \”mainartSize\”: \”medium\ ”, “url”: “/content/dam/thestar/business/personal_finance/04/25/2022/can-i-provide-that-mortgage-heres-how-you-can-cash-based-to -buy-your-first-house / in_your_corner_2_.jpg \ “}”, “publish_time”: “2022-04-25T09:00:00Z”, “last_modified”: “2022-04-24T13:38:48.993Z”, “inHouseArticle”: “true”, “image”: “https://images.thestar.com/ji43R9MUE-Ap00KOnYvWoJYNkBM=/1280×1024/smart/filters:cb(1650897584819)/https://www.thestar.com/content /dam/thestar/business/personal_finance/2022/04/25/can-I am taking on this mortgage How can you safely borrow to buy your first home /in_your_corner_2_.jpg “,” enableLivechat “:” false “,” Images “:” https: //www.thestar.com/assets/img/thestar-ribbon.png”,”noShow”:”false”,”enableConversations”:”true”,”abstract”:”talk to a mortgage broker and do a personal budget assessment before Start looking for a home, experts say. “,” sm g_tag “:” personal_finance”,” url “:” https://www.thepeterboroughexaminer.com/ts/business/personal_finance/2022/04/25/can-i-afford-that-mortgage-heres-how-bulk -You can-borrow-to-buy-your-first-home-safely- “site_name”: “thestar.com”, “enableLivechatadmin”: “false”, “Publisher”: “https://www.facebook.com/torontostar”, “author_names” “:[“Clarrie Feinstein”]The authors:[{\”author\”:\”Clarrie Feinstein\”,\”photo\”:{\”origImageSize\”:\”2483×3262\”,\”lastmodified\”:2700061000,\”url\”:\”/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg\”}}]”,” smg2_tag “:” business “} “,” seoHead “:” Can I afford this mortgage? Here’s how much you can safely borrow to buy your first home “,” chevronTextBGColor “:” 009988 “,” Title “:” Can I Afford This Mortgage? Here’s how much you can safely borrow to buy your first home,” subtitle: “Talk to your mortgage broker and do a personal budget assessment before you start your home search, says the expert. “,” shortSeoGoogleHead “,” Can I afford this mortgage? Here’s how much you can safely borrow to buy your first home,” canonicalUrl “:” https://www.thestar.com/business/personal_finance/2022/04/25/can-i-afford-that-mortgage-heres-how- You can safely-borrow-to-buy-your-first-house.html,” seoDescription: “Talk to a mortgage broker and do a personal budget assessment before you begin your home search, says the expert. “,” enableConversations “: true,” “publishepoch”: 1650877200000, “lastmodifiedepoch”: 1650807528993, “abstractVisible”: true,” abstract “:” Talk to a mortgage broker and do a personal budget assessment before you start looking for a home, he says The expert. Related links:[]”paywallMode”: “locked”, “storyuid”: “64350ea6-20a4-44e8-8f79-3b42f13cd988”, “republish”: true, “slideshowid”: “B881721243Z.1”, “lastmodified”: “04 24 2022” , “stnPlayer”: {“type”: “stnPlayer”, “playerPosition”: “SecondaryMainart”}, “lastreplicated”: “Mon., April 25, 2022”, “readtime”: 2, “breadcrumbs”:[{“label”:”Business”,”relurl”:”/business”,”url”:”https://www.thestar.com/content/thestar/business.html”},{“label”:”Personal Finance”,”relurl”:”/business/personal_finance”,”url”:”https://www.thestar.com/content/thestar/business/personal_finance.html”}]”Authors”:[{“author”:”Clarrie Feinstein”,”photo”:{“origImageSize”:”2483×3262″,”lastmodified”:2700061000,”url”:”/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”,”sizes”:{“1:1”:{“small”:”https://images.thestar.com/DN2xUqBjcKY1PO4l_lL3Mp5Ps-s=/100×100/smart/https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”},”3:2″:{“small”:”https://images.thestar.com/Yqw_qUoILjnPNSDezsnqugqHPSU=/114×76/smart/https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”,”medium”:”https://images.thestar.com/sIuRiKc6NV3z44UPAnf660Q3ha0=/330×220/smart/https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”,”large”:”https://images.thestar.com/xTYn5Ue8cQQcgq0e9e4tWa3I8bE=/690×460/smart/https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”},”21:9″:{“large”:”https://images.thestar.com/acmbJL4ZnCcH8dbg2m7HgglZ1E4=/1080×460/smart/https://www.thepeterboroughexaminer.com/content/dam/thestar/columnist_logos/Feinstein_Clarrie_logo2022.jpeg”}}},”location”:”Toronto”,”tag”:”feinstein_clarrie”,”credit”:”Staff Reporter”,”twitterId”:”ClarrieF”,”email”:”clarriefeinstein@torstar.ca”}]”urlMetatag”: “https://www.thepeterboroughexaminer.com/ts/business/personal_finance/2022/04/25/can-i-afford-that-mortgage-heres-how-much-you-can-safely- metaphor-to-buy-your-first-house.html “,” numOfParagraphs”: 11 “,” liftigImage “,” captionPosition “:” overlay “,” fullWindowMainart “,” type “:” image “,” imageid “:” GK81GM2T6.3 “,” origImageSize “:” 1200×803 “,” cropthumb “:” 0,0,1200,800 “,” lastmodified”: 1650881088620 “,” forceoriginal “,” caption “:” before jumping to Inside the real estate market, Jason Heath suggests meeting with a mortgage broker or specialist to do a personal assessment of all your costs to assess your budget and see how much you can borrow. : “/content/dam/thestar/business/personal_finance/04/25/2022/can-i-provide-that-mortgage-heres-how-much-you-can-safely-borrow-to-buy-your-first-home/in_your_corner_2_. jpg “,” mainartSize “:” average “,” delivery”:[{“url”:”https://images.thestar.com/tyD_m5UQfQoSe0F_E2XWT3UQRz8=/0x0:1200×800/93×52/smart/filters:cb(1650881088620)/https://www.thepeterboroughexaminer.com/content/dam/thestar/business/personal_finance/2022/04/25/can-i-afford-that-mortgage-heres-how-much-you-can-safely-borrow-to-buy-your-first-house/in_your_corner_2_.jpg”,”width”:93,”height”:52,”scalefactor”:8,”aspect”:”wide”}]}, “seopublisheddate”: “2022-04-25”, “seomodifieddate”: “2022-04-25T09:00: 04.514Z”, “primarylabel”: {“label”: “Personal Finance”, “relurl”: ” /business/personal_finance”,”url”:”https://www.thestar.com/content/thestar/business/personal_finance.html”}”,”totalParas”:0″,”additionalEvents”:”,event29″,”sectionLevel1 “:” Business || / business “,” sectionLevel2 “:” Personal Finance || / business / personal_finance “} // ->

advertisement

Talk to a mortgage broker and do a personal budget assessment before you start looking for a home, experts say.

by Clary FeinsteinStaff Reporter

Monday 25 April 2022timer2 Accurate. Read

How Much Mortgage Can You Afford? It’s one of the first questions any new home buyer faces.

Knowing how much you can borrow without overwhelming your head requires detailed planning and realistic goals, says Jason Heath, managing director of Objective Financial Partners.

Heath suggests that potential buyers start by meeting with a mortgage broker to make a personal assessment of your costs. Heath points out that “some people live very frugally while others spend more, and these factors are not incorporated into the amount the bank will lend to you.”

How much you can safely borrow depends primarily on the percentage of your salary that will go towards housing costs and debt payments for a mortgage of a certain size. There are two main ratios to consider which are the Gross Debt Service Ratio (GDS) and the Total Debt Service Ratio (TDS).

GDS is the percentage of your total monthly household income that covers housing costs (including mortgage payments, utilities, taxes, and apartment fees). The Canada Mortgage and Housing Corporation charges the GDS to 39 percent of your income.

TDS is the percentage of total monthly household income that covers housing costs plus other debts (including car payments, credit card debt, and other loans). CMHC limits this percentage to 44 percent of your income.

You can find a debt service calculator on the CMHC website where you can run some numbers.

To give you an idea of ​​how much you can borrow, we asked Leah Zlatkin, a mortgage broker at LowestRates.ca, to calculate the typical mortgage amount for a first-time buyer making $100,000 a year.

If you get a five-year fixed rate mortgage of 3.25 percent, you’ll have to be able to handle a mortgage with a “stress test” rate of 5.25 percent, she says. This would qualify you for a mortgage of around $528,000. Each quarter-percentage-point increase over the stress test rate would equate to about $12,000 less in funding.

With a down payment of $30,000, that means you can buy a home that costs about $560,000.

The reality, Heath says, is that many high-income professionals, including doctors and lawyers, cannot afford real estate in Toronto. That is why many are looking for homes outside the city, and are considering creating smaller apartments or providing a larger down payment.

Share:

more than the examiner and partners