Personal Affordability Calculator
Introduction
Welcome to our Personal Mortgage Calculator! This tool offers a reliable estimate of your potential mortgage borrowing capacity. Gain a deep understanding of mortgage affordability to empower your decision-making during the home-buying process.
Why Use a Mortgage Calculator?
Explore the compelling reasons to leverage a mortgage calculator. Uncover its utility as a powerful financial planning tool, enabling you to project mortgage affordability and make well-informed decisions on your homeownership journey.
How to Use This Calculator
Follow a step-by-step guide on entering accurate information into the calculator. Ensure your inputs align with your financial goals and preferences, unlocking meaningful results for an informed home-buying experience.
Financial Overview
Obtain a holistic view of your overall financial health and its impact on your mortgage eligibility. Delve into key factors shaping your ability to afford a mortgage, offering valuable insights for strategic decision-making.
Debt-to-Income Ratio (DTI)
Grasp the significance of the Debt-to-Income Ratio (DTI) and its role in determining your mortgage qualification. Understand how maintaining a healthy DTI ratio enhances your chances of securing a mortgage.
Emergency Fund
Recognize the pivotal role of a well-funded emergency fund in homeownership. Explore how an emergency fund contributes to financial stability and bolsters your mortgage affordability.
Input Information
Provide detailed information about your financial situation to receive precise calculations. This section covers crucial details, including income, bonuses, self-employment considerations, and the approach used to calculate your maximum borrowing amount.
Income Details
Enter your applicable income, encompassing your base salary and annual bonus (if applicable). For self-employed individuals, consider the average taxed income reported in your last two tax filings.
Calculation Approach
Understand the calculation approach for determining your maximum borrowing amount. Explore the Gross Debt Services (GDS) Ratio and Total Debt Servicing (TDS) Ratio to make informed decisions about your mortgage affordability.
Definitions
Familiarize yourself with key terms and calculations used in mortgage affordability estimation. Gain clarity on stress testing, monthly home stress tested payments, and considerations for outstanding monthly debts.
Stress Tested Mortgage Amount
Learn about stress testing and how it assesses your ability to withstand mortgage rate fluctuations at renewal. Understand the calculation using the higher of 5.25% or the expected mortgage rate +2% for stress testing.
Monthly Home Stress Tested Payment
Explore the calculation of the monthly home stress tested payment, including the sum of the stress tested mortgage amount and applicable monthly home costs such as heating, property taxes, and maintenance fees.
Monthly Home Stress Tested Payments + Net Outstanding Monthly Debts
Understand the calculation of the sum of the monthly home stress tested payment and applicable monthly debts, including considerations for loan car repayments, credit card monthly debt repayments, and more.
Note on Credit Card Balances
Consider the impact of credit card balances on outstanding debts. Regular credit card balances should be considered as 0, unless you have outstanding balances repaid monthly.
Expense Breakdown
Gain insight into additional costs associated with homeownership for a comprehensive understanding of your financial commitment. Explore maintenance and repairs, heating and utility costs, and Homeowners Association (HOA) fees.
Maintenance and Repairs
Estimate the costs associated with maintaining and repairing your home over time. Understand how these costs factor into your overall budget and financial planning.
Heating and Utility Costs
Anticipate monthly utility costs, including heating, electricity, and water. Budget effectively by considering these ongoing expenses in your homeownership plan.
Homeowners Association (HOA) Fees
If applicable, assess the impact of Homeowners Association (HOA) fees on your overall housing expenses. Understand how these fees contribute to the overall cost of homeownership.
Debt Management
Evaluate existing debts and their influence on your mortgage affordability. Explore strategies for managing monthly debt payments and understand how vehicle payments impact your financial eligibility.
Managing Monthly Debt Payments
Assess your current debt obligations and their impact on your ability to secure a mortgage. Explore effective strategies for managing monthly debt payments within the context of your financial goals.
Impact of Vehicle Payments
Understand how existing vehicle payments may affect your overall financial picture and mortgage eligibility. Consider the implications of vehicle financing on your mortgage affordability.
Calculation Results
Review the calculated results to make informed decisions about your mortgage options. Explore the maximum property value you can afford and understand the maximum amount you can borrow for your mortgage.
Max Allowed Property Value
Discover the maximum property value you can afford based on the calculated results. Use this information to refine your home search and align your expectations with your financial capacity.
Max Borrowing Amount
Understand the maximum amount you can borrow for your mortgage based on the calculated results. Use this insight to tailor your mortgage application and choose a loan that aligns with your financial goals.