Bmo how much can i afford calculator

A larger down payment also saves you money on the cost of CMHC insurance. Get a better mortgage rate: Shop around for the best mortgage rate you can find, and consider using a mortgage broker to negotiate on your behalf. A lower mortgage rate will result in lower monthly payments, increasing how much you can afford.

It will also save you thousands of dollars over the life of your mortgage. Increase your amortization period : The longer you take to pay off your loan, the lower your monthly payments will be, making your mortgage more affordable. However, this will result in you paying more interest over time. These are just a few ways you can increase the amount you can afford to spend on a home, by increasing your mortgage affordability.

However, the best advice will be personal to you. Mortgage Affordability Calculator Content last updated: January 7, When searching for a new home, the first step is to figure out how much mortgage you can afford. Advertising Disclosure Inputs.

Property Tax: Property Tax An annual tax levied by the municipality in which your home is located. We have used an estimate based on the average in your province. Your combined income will be used to calculate the mortgage you can afford. Condo Fees: Condo Fees Condo fees cover common building expenses and maintenance in multi-unit properties. We have used a default estimate based on provincial averages. This does not include the balances themselves, only the interest portion.

Car Payment: Car Payment Your monthly leasing or financing outlay on any household vehicles. Affordability Maximum Affordability This is the maximum home price you can afford based on your income or combined income and expenses. Your maximum affordability is also constrained by the Qualifying Mortgage Rate set by the Bank of Canada. The Qualifying rate requires you to qualify for a 5-year fixed mortgage rate if you seek a variable mortgage or a mortgage with a lesser term.

This is mandated to ease affordability concerns if interest rates rise in the future. How do larger down payments save you money? Term is the length of time you commit to the mortgage rate, lender, and associated mortgage terms and conditions Amortization period is the length of time it will take you to pay off your entire mortgage. Quick Tip Variable vs. Fixed Mortgage Rates Fixed Mortgage Rates With a fixed mortgage rate, the mortgage rate and payment you make each month will stay constant over your mortgage term.

Variable Mortgage Rates With a variable mortgage rate, the interest rate you pay will fluctuate with the prime lending rate as set by the Bank of Canada.

Historical variable vs fixed mortgage rates. How does the term influence your mortgage rate? Short term vs long term mortgage rates. Cash Needed How much extra cash will I need when my house closes?

Our tool will help you calculate these costs, so you know how much you'll need to save. Affordability Build Your Own. Expenses Scenario: Max. Property insurance. Interest Rate Risk What would my payment be at higher interest rates? Mortgage Amount Scenario: Max. Amortization Schedule What do my payments look like over time? Scenario: Max. Term: 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years.

Best variable rates 0. Gross Debt Service Ratio. Total Debt Service Ratio. Mortgage payment calculator Land transfer tax calculator CMHC mortgage insurance calculator Mortgage refinance calculator Mortgage penalty calculator Debt consolidation mortgage calculator Maximum equity mortgage refinance calculator. What type of home are you looking for? Condo Apt. Townhouse Detached House Not Decided. Enter your average monthly payment. If you have multiple sources of debt, enter the total for your household.

Bills e. Phone, TV. Other Expenses. Enter your average monthly expenses in each of the above categories, excluding any housing-related expenses. Exclude your heating costs from your utility bill total. Monthly Housing Expenses. Best Mortgage Rates in Canada. New: Buying a property.

Refinance: Changing your mortgage amount. Renew: Mortgage from a new lender at the end of your mortgage term. Rates for other mortgages are higher.

How is my affordability calculated? The TDS ratio is calculated by dividing your total annual housing-related and debt expenses by your gross annual income. These expenses include: Your mortgage payment both principal and interest Your property tax Your heating costs Half of your condo fees if applicable All forms of debt payments For TDS purposes, your mortgage payment may be computed at an interest rate higher than your current rate.

See the section on stress-testing below for details. The GDS ratio is calculated by dividing your annual housing-related expenses by your gross annual income. These expenses include: Your mortgage payment both principal and interest Your property tax Your heating costs Half of your condo fees if applicable For GDS purposes, your mortgage payment may be computed at an interest rate higher than your current rate.

Your total monthly expenses cannot exceed your net after-tax monthly income. How to Increase Your Mortgage Affordability There are a number of ways that borrowers can increase their mortgage affordability and lower their costs over the lifetime of their mortgage: Save up a larger down payment: A larger down payment can lower your mortgage borrowing and lead to smaller payments and less interest over the lifetime of your mortgage. Increase your credit score: If you have a low credit score, increasing your credit score could help your eligibility for mortgage insurance and better terms on your mortgage.

Lenders are more willing to lend more to a borrower who has proven their ability to pay bills on time compared to one who has not. Shop around for rates: A lower mortgage interest rate can lower your regular mortgage payments, letting you handle a larger mortgage with your income.

It can also save you tens of thousands over the course of your mortgage. Be sure to shop around for the best mortgage rates. Check out different lenders: Different lenders will have different standards for lending and offer different terms and conditions on their mortgages. Going over your options with a mortgage broker can help you get the most from your mortgage.

Increase your amortization: If you increase your amortization, you can reduce your regular payments and borrow more by spreading out the mortgage over a longer period of time. Doing so may increase your total interest, however, and decrease your choice of mortgage rates and lenders. Before committing to a decision, check how different amortizations will affect your mortgage and your monthly payments.

Expenses Scenario: 1 5. Property Tax. Monthly Debt Payments. Condo Fees. Property insurance. Interest Rate Risk What would my payment be at higher interest rates?

Mortgage Amount Scenario: 1 5. Amortization Schedule What do my payments look like over time? Scenario: 1 5. Term: 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 9 years 10 years. Asking Price. Down payment The amount of money you pay up front to obtain a mortgage. Mortgage insurance Mortgage default insurance, commonly referred to as CMHC insurance, protects the lender in the case the borrower defaults on the mortgage.

Mortgage default insurance is calculated as a percentage applied to your mortgage amount. In Canada, the maximum amortization period for insurable mortgages is 25 years. Longer amortization periods allow homeowners to make smaller monthly payments, but equate to more interest paid over the life of the mortgage. STEP 2 Choose an amortization period. Amortization period 1 Select 5 years 10 years 15 years 20 years 25 years 30 years Other. Amortization period 2 Select 5 years 10 years 15 years 20 years 25 years 30 years Other.

Amortization period 3 Select 5 years 10 years 15 years 20 years 25 years 30 years Other. Amortization period 4 Select 5 years 10 years 15 years 20 years 25 years 30 years Other.