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There are two types of mortgages:
(1) Conventional Mortgage, and
(2) High Ratio Mortgage.
Over 25% downpayment. Fees: application, processsing & appraisal. Ask if your bank will waive these!
High Ratio Mortgage
Purchasers with less than 25% downpayment are required to have mortgage insurance from CMHC (Canada Mortgage and Housing Corporation) or G.E. Capitol. This insures the lender not the borrower. These additional fees are 'amortized' in with mortgage payments and are calculated as follows:
5% - 10% down = 3.75% of mortgage value
10% - 15% down = 2.5% of mortgage value
15% - 20% down = 2% of mortgage value
20% - 25% down = 1.25% of mortgage value
How Much Can I Afford?
Lending institutions establish a 'rule of thumb' for the amount of mortgage financing available to a a borrower. This formula is based on (a) income, (b) amount of indebtedness, (c) amount of downpayments; and is always directly tied to the interest rates.
Generally speaking, calculate 32% of your total monthly gross salary for mortgage, property taxes and heat OR up to 40% to include other outstanding debts like credit cards or car payments.
Do You Have Some Extra Money?
I can explain how paying off your mortgage quicker or making extra payments can save you $$$ thousands of dollars!
Use The Mortgage Calculator to the left To Approximate Your Monthly Payments.