Mortgage Qualifier

The first steps in buying a house are ensuring you can afford to pay at least 5% of the purchase price of the home as a down payment and determining your budget. This calculator steps you through the process of finding out how much you can borrow. Fill in the entry fields and click on the payment schedule button to see a complete amortization schedule of your mortgage payments.

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*Mortgage Insurance is usually required with a down payment of 20% or less - Please contact us for further information

Definitions

Annual income
Your gross annual income. For married couples this is your total combined gross annual income. Please note that if you enter a purchase price or total monthly payment the calculator will determine the gross annual income required to qualify for the purchase. This calculated amount may be higher or lower than your actual income.

Purchase price
The price of the home you wish to purchase. This is the actual price you pay, not including any closing costs. If you enter an annual income or a total monthly payment, the purchase price will be calculated based on these amounts.

Total monthly payment
Total monthly payment that you can qualify for. This is the total of principal, interest, taxes and heat paid each month. If you enter a purchase price or annual income, the total monthly payment will be calculated based on these amounts.

Cash on hand
Cash you have for the down payment and all closing costs. You can purchase a home with as little as 5% down payment with mortgage loan insurance. An ideal down payment is between 10 - 20% of the purchase price of the home.

Interest rate
The current interest rate you can receive on your mortgage.

Amortization in years
The number of years over which you will repay this mortgage.

Annual property taxes
The annual property tax paid on the home you are purchasing.

Monthly heat
Total monthly payment for your home's heating bill. CMHC and Genworth currently only require heat costs to be incorporated into the monthly costs, however, there are other monthly costs associated with properly running a house such as hydro, water, telephone, cable, etc. You may wish to add these costs into the ?Heat? category in order to properly calculate your monthly payment.

Monthly car payment(s)
Total monthly payment for your car loan(s) or lease(s).

Credit card payments
Total monthly minimum payments for your credit cards.

Other loan payments
Any other installment loan payments, such as student loans or unsecured loans.

Condo Fee
Monthly fee charged for your condominium that you expect to incur with the ownership of this home. Please note that condominiums are referred to as "strata" in the Province of British Columbia. We add 50% of your condominium fee to your Gross Debt Service (GDS) when calculating the maximum mortgage that you can qualify for.

Other closing costs
Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees payable.

Sales Taxes - HST and GST
Many new homes have the purchase price with HST and/or GST included. If this is the case for your home purchase, the checkbox to include HST/GST should be left unchecked since the HST or GST will be included in the purchase price. When we calculate HST or GST, it is based on the provincial rate times purchase price, minus any HST/GST rebate. Rates and rebates can be found in the table below:

Provincial GST/HST Rates as of July 1, 2010
British ColumbiaHST at 12%
Federal HST Rebate*, additional HST rebate of 5% of purchase prices up to a maximum of $20,000.
OntarioHST at 13%Federal HST Rebate*, additional HST rebate of 5% of purchase prices up to a maximum of $24,000.
Nova ScotiaHST at 15%Federal HST Rebate*, limited first time home buyers rebate of 1.5% of purchase price up to a maximum of $1,500. This limited rebate is not included in the calculator.
New BrunswickHST at 13%Federal HST Rebate*, no additional rebate
Newfoundland and LabradorHST at 13%Federal HST Rebate*, no additional rebate
Territories and other provinces in CanadaGST at 5%Federal GST Rebate*

*A Federal GST/HST rebate is available on any purchase subject to HST or GST and is calculated as follows: For homes under $350,000, the rebate amounts to 36% of GST, up to a maximum rebate of $6,300. For homes between $350,000 and $450,000, the maximum rebate of $6,300 declines to zero on a proportional basis. All homes selling for more than $450,000 receive no GST rebate. For provinces with HST, the calculation is the same but applies to the Federal 5% portion of the HST, which results in the same rebate uniformly applied across all provinces.

It is important to be aware that there may be additional taxes on new home purchases depending on the province where the purchase is made. These additional taxes are not included in this analysis.

For more information, please visit: http://www.cra-arc.gc.ca/E/pub/gp/rc4028/rc4028-e.html#P103_1775

Mortgage Insurance Required?
Check this box if you wish to calculate the amount of mortgage insurance payable. For additional information regarding mortgage insurance please read the definition below.

Mortgage Loan Insurance Premium (non-refundable)
Mortgage insurance makes it possible for homebuyers to purchase a home using a lower down payment. The Canadian Bank Act prohibits most federally regulated lending institutions from providing mortgages without mortgage loan insurance for amounts that exceed 80% of the value of the home or purchases with less than 20% down payment. The Canadian Mortgage and Housing Corporation (CMHC) and Genworth Financial are two companies that offer Mortgage Loan insurance. For more information please visit their websites at www.chmc.ca and www.genworth.ca.

CMHC and Genworth Financial's current Mortgage Loan insurance Premium Rates*:
Loan Size
(% of property value)
Rate (as a % of loan)
Up to and including 65% (over 35% down payment)
0.5%
Up to and including 75% (25% to 34.99% down payment)
0.65%
Up to and including 80% (20% to 24.99% down payment)
1.00%
Up to and including 85% (15% to 19.99% down payment)
1.75%
Up to and including 90% (10% to 14.99% down payment)
2.00%
Up to and including 95% (5% to 9.99% down payment)
2.75%
Up to and including 95% Flex Down or Cash Back Equity Owner-Occupancy Program** (5% to 9.99% down payment)
2.90%

*An additional 0.2% is added to all mortgages with amortizations of 26 to 30 years. An additional .4% is added to all mortgages with amortizations of 31 to 35 years.

This calculator assumes that your mortgage insurance premium can be financed by your mortgage, which can greatly reduce the amount of upfront money that is required to purchase a home.

This calculator does not include Genworth's Top-up Premiums or Blended Amortization for refinancing.

**Not all Financial Institutions offer CMHC's Flex Down and/or Genworth Financial's Cashback Equity Owner-Occupancy Program.

Below is a brief summary of the two programs:

    CMHC's Flex Down
    Own your own home sooner by using a wider range of sources for your down payment. If you have a proven track record of meeting your debt requirements and sufficient income to support mortgage loan payments, your lender may be able to provide you with CMHC's Flex Down product. Sources for your down payment can include: borrowed funds, gifts and lender cash back incentives. For more information please see: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

    Genworth Financial's Cashback Equity Owner-Occupancy Program
    Some home buyers have an excellent credit history but have not yet saved the required down payment. Others have used their savings to build assets in different ways. Genworth Financial offers mortgage default insurance to both these groups. For more information please see:http://www.genworth.ca/mi/eng/industry_professionals/premiums.asp

GDSR: Gross Debt Service Ratio and TDSR: Total Debt Service Ratio
The most important amounts to consider are your gross household income, your down payment and the mortgage interest rate. Lenders will also consider your assets and liabilities. Your own lifestyle and debt comfort zone also come into play. To help you see how much you can afford, there are two simple rules that lenders use to determine how much of a mortgage you qualify for. These rules are governed by Canada Mortgage and Housing Corporation (CMHC) which is Canada's national housing agency and Canada's premier provider of mortgage loan insurance, mortgage-backed securities, housing policy and programs, and housing research.

The first rule is that your monthly housing costs should not exceed 32% of your gross monthly household income (GDSR). Housing costs include monthly mortgage payments, taxes and heating expenses. If applicable, this sum should also include half of monthly condominium fees.

Secondly, your entire monthly debt load should not be any more than 40% of your gross monthly income (TDSR). This includes housing costs, and other debts such as car payments, personal loans, and credit card payments.

Qualify amount
Shown as "Total monthly payment." This is the total amount you qualify for per month. This amount is the total of "Principal, Interest, Tax and Heat" for your home.