What Can I Afford Worksheet
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1T h e P e g g y H i l l Te a m a t K e l l e r W i l l i a m s E x p e r i e n c e R e a l t y, B r o k e r a g e
“What Can I Afford ?” Worksheet
Step 3
Calculate the amount available to apply to your
Step 1
monthly mortgage payment. This figure will be used to
Calculate your Monthly Housing Costs
calculate how much mortgage you are eligible for.
Most lenders say that your monthly housing expenses
To calculate this amount: identify the lower of your GDS
(principal, interest and taxes) should not exceed 32% of
or TDS:
$ __________________
your before tax personal income. Also known as your
Subtract an appropriate monthly amount for property
Gross Debt Service Ratio (GDS).
tax:
Take your total monthly gross (before tax) income
$ __________________
—
$ __________________
This is the amount that the lenders will now use to cal-
Multiply it by the maximum GDS Ratio (32%)
X 0.32
culate how much mortgage you should be eligible for.
This is the maximum amount available for your mortgage
= $ __________________
payment, property taxes and condo fees (if applicable)
Step 4
= $ __________________
Determine the Purchase Price you can afford.
This is the maximum monthly amount that can be applied
1.
Find the closest number in Column A to your
to housing expenses.
number from step 3.
Step 2
2.
The number in Column B is your eligible mort-
Calculate your Total Debt Load
gage amount
Your Debt Load takes into account monthly housing ex-
3.
The minimum required down payment is 5% of
penses plus any other debts and loans that you may have.
the purchase price, or number in column B
Lenders caution that your TDS ratio should not exceed
Based on a minimum 5% down payment amortized at 3.29% for
40% of your before tax personal income.
25 years
Take your monthly gross (before tax) income
A—Monthly
B—Mortgage
C—Minimum Down
$ __________________
Payment
Amount
Payment
Multiply it by the maximum TDS Ratio (40%)
Mortgage amount
$953.19
$200,000
X 0.40 $ __________________
$ _______________
$1,072.34
$225,000
Subtract your regular monthly expenses (i.e. car payments, per-
sonal loans etc)
X 0.05
$1,119.48
$250,000
= $ _______________
$ __________________
—
$1,310.63
$275,000
This is the maximum amount available for your mortgage
$1,429.78
$300,000
payment, property taxes and condo fees (if applicable)
$1,548.93
$325,000
= $ __________________
$1,668.00
$350,000
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