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Mar 21, 2018 · This calculator is for illustrative purposes only. While every effort is made to keep this tool up-to-date, CMHC does not guarantee the accuracy, reliability or completeness of any information or calculations provided by this calculator. CMHC is not be liable for loss or damage of any kind arising from the use of this tool.
- Canadian Home Mortgage Qualification Tips
- Loan Opportunities
- Pros & Cons of Fixed and Adjustable Rates
- Government Incentives
- Who Can Help You in The Mortgage Market?
- What Happens If You default?
- The Hottest Markets
- Housing Bubbles
- Dealing with House Price Falls
Location and Affordability
If you are a first-time home buyer looking to take that first step on the housing ladder, real estate affordability differs massively across the country. In regions like the Prairies (central western Canada) and the Atlantic provinces (eastern, coastal) getting on the property ladder is attainable for those earning a typical wage, especially if you are smart with saving and investing your cash. The cheapest province is New Brunswick, where property can be purchased with a typical price of $28...
Although the population of Canada is not much larger than the entire city of Tokyo, almost a quarter million people immigrate and want to buy homes each year. When you add that to the native demand from people that grow up locally and would like to buy, you end up with a pretty competitive market. The focus of the Canadian government in the loan ma...
Fixed rate
Fixed rate financing is ideal when you plan to stay in your home for an extended period of time. While they can initially be more costly than adjustable rates, they protect you if mortgage rates go up by locking you into the same rate for a set period of time - commonly five years. In the 1980s in Canada some people were left high and dry when interest rates on some loans went up to around 16 to 18% - a rate you’d expect with a credit card - so fixed rates would protect you in those circumsta...
Adjustable rate
Adjustable rates can give you a lower upfront cost than a fixed rate, which can be advantageous depending on your circumstances. For example, if you need to remodel your home after purchasing a project, you’ll have more money spare than with a fixed rate. Adjustable rates go up or down depending on how the central bank’s policy interest rate moves, so it can be something of a gamble whether they pay off. The good news for applicants is that in the current climate it’s unlikely the Bank of Can...
Mortgage refinance penalty
Whether you favour the fixed or adjustable model, in both cases you need to read the small print when taking out the loan to figure out when you’re liable to pay a penalty to refinance. In many cases there’s a penalty within the first three to five years if you refinance, so that’s something you need to take into account when determining whether it makes sense to commit for such a long period.
Tax Credit
The Canadian government has some major incentives for first-time home buyers. The first incentive is a tax credit for home buyers, enabling you to claim back up to $10,000. It doesn't take that much to qualify and your real estate agent can normally ensure that you are qualified before you go out and start putting bids on homes. Depending upon how much you qualify for, it can impact the amount of the loan you may need to purchase a property. There is also a program which provides tax credits...
Land Transfer Tax rebate
The Land Transfer Tax, a tax paid when buying a home, is subject to incentives depending on the province. In Ontario the tax is returned as a rebate for first-time buyers on the first $368,000 of the cost of their homes. This amounts to a saving of up to $4,000, while if they’re buying in Toronto they benefit from another reduction of $4,475. There are similar tax rebates in British Columbia, at $8,000, and Prince Edward Island, at $2,000 (source).
First Home Savings Account
Savers who want to buy in a few years’ time can also utilise the country’s First Home Savings Account (FHSA). The account is available to Canadian residents who have never owned property, and it enables savers to contribute $8,000 per tax year to the account up to a total of $40,000 – which they can eventually use to buy property. A big incentive of the FHSA is savers can deduct their contributions from their income when filing their taxes every year, so you’ll pay tax on less money than you...
There are many lenders in Canada serving the mortgage market: banks and other large financial institutions. Mortgage brokers can help you navigate the best deals, as most have access to a broad range of local & nationwide lenders. You can also go to banks directly, like ScotiaBank and TD Canada Trust, however in that case you are only given access ...
When taking out a mortgage there’s always the risk of falling into arrears, meaning you fall behind on your payments. If you lag behind for an extended period of time the worst case scenario is your lender repossesses and sells your property. Thankfully this is not the norm, as in the Canadian market banks are generally careful to make sure you’re ...
Vancouver is one of the most beautiful cities in North America. Its continued development as a major hub on the Pacific rim causes it to be a magnet for investment from Asian countries. Originally, it was thought that Hong Kong Chinese would settle there and there would be little else going on from Asia. Instead, the growth that the city experience...
The term ‘housing bubble’ has been widely bandied about since the US housing bubble burst during the global financial crisis. A bubble effectively means house prices are overvalued, resulting in house prices falling down the line. In Toronto and Vancouver the prospect of their being a ‘bubble’ has seemed very real owing to the post-pandemic surge i...
In the long run house prices tend to increase in countries with stable economies, like Canada. However in the unlikely event that house prices fall, you’re more protected if you use a larger down payment. If you only use a small down payment of 5%, if house prices fall there’s a danger that the loan could be worth more than your home value, in what...
In Canada, as per the Federal Department of Finance, as of December 15, 2024, home buy ers must make a minimum down payment of 5% on the first $500,000 of their home’s purchase price, and then 10% on the remaining portion between $500,001 and $1.5 million.
- Jamie David
- Determining how much you can afford to pay when purchasing a home, as well as your monthly mortgage costs, is likely your biggest consideration whe...
- A home buyer who is making a less than 20% down payment on their home purchase – also referred to as a “high-ratio borrower" – is required by law t...
- The amount you’ll pay in CMHC insurance (also referred to as mortgage default insurance), is calculated as a percentage of your mortgage loan, and...
- Let’s use the Affordability Payment Calculator above to determine a buyers’ maximum affordability in this scenario. Assuming the home buyer has an...
- In Canada, the maximum mortgage amortization for a high-ratio mortgage (less than 20% down paid) is 25 years. Low-ratio borrowers, however, can get...
- If you select the First-Time Home Buyer option, the calculator applies the appropriate federal and provincial rebates available to first-time home...
- The Estoppel certificate fee is commonly known as a "condo status certificate". It is issued by the condominium corporation as part of the due dili...
- The amount of income a home buyer has is only one part of the mortgage affordability equation; your lender will also base the amount you’ll qualify...
- In Canada, homeowners can access up to 65% of their home’s value as part of a Home Equity Line of Credit (HELOC). However, it’s important to note t...
Our mortgage affordability calculator estimates how much house you can afford based on your income and expenses. You can get an estimate of the maximum mortgage amount you qualify for and the monthly payment. Generally speaking, it is recommended that you keep your mortgage payment at about 25% or less of your overall monthly budget.
How to use our mortgage affordability calculator. Annual Income – Enter your gross annual income, which is the amount of money you earn before taxes and other deductions. Down payment – Enter the cash amount you are ready to pay upfront for the property. Mortgage Rate – It is the interest rate at which a lender will offer you the mortgage.
Feb 16, 2022 · Mortgage affordability refers to how much money a person can borrow to purchase a home. It’s a figure based on their household income, future living expenses (i.e. the mortgage payments, heating ...
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3 days ago · Conversely, you can let nesto’s Affordability Calculator estimate your property taxes. The chart below will list the best option for your transaction. 0.50% to 1.3% of the purchase price depending on the type of building, municipality and province – guidelines will vary from lender to lender.
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related to: what does affordability mean when buying a home calculator taxesUse Our Online Mortgage Calculators to Estimate Your Home Loan Payments, Today. Calculate Your Mortgage Payments With Our Free Mortgage Calculator, Now.
Highest Satisfaction for Mortgage Origination, 2010-2017 - J.D. Power
