Use this calculator to see the home you can afford if you make $40,000 in a year
For Interest Rate: 6%
Loan Term: 30 years
You will receive loan of $105,634.69
Okay, so let's imagine you make $40,000 a year. That's a lot of money! Now, let's figure out how much of that you can spend on a house.
A person called a mortgage broker can help you decide. They might say you can spend 19% of your yearly income on your mortgage. That means you can spend $7,600 a year, or $633.33 each month on your mortgage.
According to Canada Mortgage and Housing Corporation ,upto 32%(preferred) of gross monthly household income can be spent on P.I.T.H (Principal, Interest, Taxes and Heating Solutions) The maximum limit is 39%.
So, according to your monthly income ($3,333.33), you can only spend up to $1,066.67 on monthly mortgage. At 6% interest rate and 20 year loan term, you can take the home loan of value $148.9K (without down payment)
If you extend the loan term to 25 years.
With monthly income of $3,333.33. With 6% interest, you will receive a loan of $165.6K (without down payment).
Your monthly interest payment remains the same $1,066.67
You will make total 300 installments
You will have to pay total amount of $320,000, which is 93.29% more than your original loan amount ($165,553.99)
For 6% interest, you will receive a loan of $177.9K (without down payment) for loan term of 30 years
Your monthly interest payment remains the same $1,066.67
You will make total 360 installments
You will have to pay total amount of $384,000, which is 115.84% more than your original loan amount ($177,911.06)
The longer the loan duration, the more money you will pay collectively
| Monthly Payment | Loan Years | Interest Rate | Home Loan Amount |
|---|---|---|---|
| $1,066.67 | 20 | 1% | $231,937.35 |
| $1,066.67 | 20 | 2% | $210,852.3 |
| $1,066.67 | 20 | 3% | $192,331.64 |
| $1,066.67 | 20 | 4% | $176,023.32 |
| $1,066.67 | 20 | 5% | $161,627 |
| $1,066.67 | 20 | 6% | $148,886.16 |
| $1,066.67 | 20 | 7% | $137,581.34 |
| $1,066.67 | 20 | 8% | $127,524.58 |
| Monthly Payment | Loan Years | Interest Rate | Home Loan Amount |
|---|---|---|---|
| $1,066.67 | 25 | 1% | $283,031.21 |
| $1,066.67 | 25 | 2% | $251,658.78 |
| $1,066.67 | 25 | 3% | $224,934.88 |
| $1,066.67 | 25 | 4% | $202,082.65 |
| $1,066.67 | 25 | 5% | $182,464.05 |
| $1,066.67 | 25 | 6% | $165,553.99 |
| $1,066.67 | 25 | 7% | $150,919.36 |
| $1,066.67 | 25 | 8% | $138,202.16 |
| Monthly Payment | Loan Years | Interest Rate | Home Loan Amount |
|---|---|---|---|
| $1,066.67 | 30 | 1% | $331,634.21 |
| $1,066.67 | 30 | 2% | $288,585.08 |
| $1,066.67 | 30 | 3% | $253,002.01 |
| $1,066.67 | 30 | 4% | $223,425.32 |
| $1,066.67 | 30 | 5% | $198,700.39 |
| $1,066.67 | 30 | 6% | $177,911.06 |
| $1,066.67 | 30 | 7% | $160,328.07 |
| $1,066.67 | 30 | 8% | $145,369.06 |