Are mortgage affordability calculators any good?

CIBC's is more realistic. Also don't forget to use 2% higher then current rate or BoC 5 year posted rate to determine a more realistic approval amount (due to recent stress test requirements)

They aren't. I can't even find a mortgage affordability calculator for rental units that can count in rental income.

lol how can anyone be comfortable with a mortgage that's 5x salary.

Luckyinfil wrote: ↑ lol how can anyone be comfortable with a mortgage that's 5x salary.

In our case that would be about a $1 million dollar mortgage - and we would NEVER even consider it. We went with approximately 1/2 of that, and I honestly would not want to handle anything more than that.

There is no multiple of income that works because the base line cost of living is relatively the same for everyone. So if you make $50k you might get 0x income because you can barely afford to live. Whereas if you make $200k you might get 5x because you have a lot more disposable to net income.

blitzforce wrote: ↑ https://www.bmo.com/main/personal/mortg ... rdability/

Annual household income: $100,000
Property tax: $4,000
Monthly living cost: $500
Monthly loan: $0
Other monthly: $300
Down payment $600,000

Only around 900k? So essentially only a 300k loan for a household with 100k income? I thought it was 5x annual salaries?

If I use CIBC, then it became 450k loan..... https://www.cibc.com/ca/mortgages/calcu ... ility.html

5x in 50k income and on 200kis quite different...
5x on 100k is doable (not sure it will pass stress test however, maybe on 30y it will) but I'd say 3x is more realistic and gave some margins while 5x doesn't.

asa1973 wrote: ↑ 5x in 50k income and on 200kis quite different...
5x on 100k is doable (not sure it will pass stress test however, maybe on 30y it will) but I'd say 3x is more realistic and gave some margins while 5x doesn't.

No wonder housing prices are going down since 100k household income hardly even qualifies for 300k.

Chickinvic wrote: ↑ In our case that would be about a $1 million dollar mortgage - and we would NEVER even consider it. We went with approximately 1/2 of that, and I honestly would not want to handle anything more than that.

So 300k loan for 100k household income is the correct amount?

blitzforce wrote: ↑ No wonder housing prices are going down since 100k household income hardly even qualifies for 300k.

You're wrong. Even with conservative 32%GDS 100k incomer could qualify for 400k under stress test (5.15%), possibly for 450k. With 30y amortization they could stretch to ~500k. Again it depends on other factors like other debts which could limit TDS in their turn, but 400k on 100k quite ligitimate for 25y imo

Mortgage Amount

$450,000
Go

Amortization period
25 years
Amortization period 1

25 years
Amortization period 2

30 years
Amortization period 3

30 years
Amortization period 4

Mortgage rate
2.94 %
Select rate
5.15 %
Select rate
2.94 %
Select rate
5.15 %
Select rate
Mortgage type 5-Year Fixed N/A 5-Year Fixed N/A
Total Mortgage Payment
$2,116
Get rate $2,656
Get rate $1,878
Get rate $2,442

blitzforce wrote: ↑ https://www.bmo.com/main/personal/mortg ... rdability/

Annual household income: $100,000
Property tax: $4,000
Monthly living cost: $500
Monthly loan: $0
Other monthly: $300
Down payment $600,000

Only around 900k? So essentially only a 300k loan for a household with 100k income? I thought it was 5x annual salaries?

If I use CIBC, then it became 450k loan..... https://www.cibc.com/ca/mortgages/calcu ... ility.html

Define "good"...

Does good mean you can spend that amount and not be house poor? Does it mean you're guaranteed to get a mortgage for that amount? Or does it mean getting a rough idea so you can go talk to a mortgage broker and not walk away in tears as he breaks your heart telling you that you can't afford your dream home...

Cause I'd say they're really only good for the last one... You should go talk to a broker if you're seriously shopping.

C

CNeufeld wrote: ↑ Define "good"...

Does good mean you can spend that amount and not be house poor? Does it mean you're guaranteed to get a mortgage for that amount? Or does it mean getting a rough idea so you can go talk to a mortgage broker and not walk away in tears as he breaks your heart telling you that you can't afford your dream home...

Cause I'd say they're really only good for the last one... You should go talk to a broker if you're seriously shopping.

C

Good meaning is it reliable. All of the calculators (big 5 banks) provide a different amount. Which one can I rely on.

blitzforce wrote: ↑ Good meaning is it reliable. All of the calculators (big 5 banks) provide a different amount. Which one can I rely on.

None. Go talk to a broker.

C

Based on your numbers, it definitely seems like BMO is more conservative but there's nothing wrong with that.

If you want to try the CIBC calculator again, lenders typically use $1/sq.ft. when estimating heating costs. Make sure you're also entering your other debt obligations (car loan, credit card, line of credit).

Have you also thought about land transfer taxes and closing costs?

blitzforce wrote: ↑ So 300k loan for 100k household income is the correct amount?

That's all I would feel comfortable with. I'm not a fan of being house poor.

blitzforce wrote: ↑ https://www.bmo.com/main/personal/mortg ... rdability/

Annual household income: $100,000
Property tax: $4,000
Monthly living cost: $500
Monthly loan: $0
Other monthly: $300
Down payment $600,000

Only around 900k? So essentially only a 300k loan for a household with 100k income? I thought it was 5x annual salaries?

If I use CIBC, then it became 450k loan..... https://www.cibc.com/ca/mortgages/calcu ... ility.html

It depends on how aggressive you want to be.

If don't stress test and do a 30-year AM, I can get you a $1.2M house with $600k down.

Luckyinfil wrote: ↑lol how can anyone be comfortable with a mortgage that's 5x salary.

Why not? My mortgage is closer to 6x and we are fine. It all depends on your budget, spending, whether you have a pension, etc.

Chickinvic wrote: ↑ In our case that would be about a $1 million dollar mortgage - and we would NEVER even consider it. We went with approximately 1/2 of that, and I honestly would not want to handle anything more than that.

200k annual income and you can't imagine having a mortgage higher than 500k? Come on, stop trolling.

BryanBreguet wrote: ↑ 200k annual income and you can't imagine having a mortgage higher than 500k? Come on, stop trolling.

I'm not trolling, so not sure why the accusation? I would not want to be a slave to a mortgage payment. I like having a good life and not being house broke.

I consider it borderline trolling because at 200k annual income, you are in like the top what, 5% of Canadians? And yet you are pretending you wouldn't comfortable with a mortgage barely enough to buy a 1br condo in Vancouver with 20% down...

This is just absurd. Not sure what you do with your money but you could go a lot higher than 500k before being remotely "house broke". Everybody is different obviously but your post is more typical of the extreme risk aversion we see on personalfinanceon Reddit.