Use this calculator to see the home you can afford if you make $500,000 in a year
For Interest Rate: 6%
Loan Term: 30 years
You will receive loan of $1,320,433.61
Okay, so let's imagine you make $500,000 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 $95,000 a year, or $7,916.67 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 ($41,666.67), you can only spend up to $13,333.33 on monthly mortgage. At 6% interest rate and 20 year loan term, you can take the home loan of value $1.9M (without down payment)
If you extend the loan term to 25 years.
With monthly income of $41,666.67. With 6% interest, you will receive a loan of $2.1M (without down payment).
Your monthly interest payment remains the same $13,333.33
You will make total 300 installments
You will have to pay total amount of $4,000,000, which is 93.29% more than your original loan amount ($2,069,424.85)
For 6% interest, you will receive a loan of $2.2M (without down payment) for loan term of 30 years
Your monthly interest payment remains the same $13,333.33
You will make total 360 installments
You will have to pay total amount of $4,800,000, which is 115.84% more than your original loan amount ($2,223,888.19)
The longer the loan duration, the more money you will pay collectively
| Monthly Payment | Loan Years | Interest Rate | Home Loan Amount |
|---|---|---|---|
| $13,333.33 | 20 | 1% | $2,899,216.87 |
| $13,333.33 | 20 | 2% | $2,635,653.8 |
| $13,333.33 | 20 | 3% | $2,404,145.53 |
| $13,333.33 | 20 | 4% | $2,200,291.44 |
| $13,333.33 | 20 | 5% | $2,020,337.51 |
| $13,333.33 | 20 | 6% | $1,861,076.96 |
| $13,333.33 | 20 | 7% | $1,719,766.75 |
| $13,333.33 | 20 | 8% | $1,594,057.22 |
| Monthly Payment | Loan Years | Interest Rate | Home Loan Amount |
|---|---|---|---|
| $13,333.33 | 25 | 1% | $3,537,890.12 |
| $13,333.33 | 25 | 2% | $3,145,734.78 |
| $13,333.33 | 25 | 3% | $2,811,686.04 |
| $13,333.33 | 25 | 4% | $2,526,033.11 |
| $13,333.33 | 25 | 5% | $2,280,800.63 |
| $13,333.33 | 25 | 6% | $2,069,424.85 |
| $13,333.33 | 25 | 7% | $1,886,492.05 |
| $13,333.33 | 25 | 8% | $1,727,526.97 |
| Monthly Payment | Loan Years | Interest Rate | Home Loan Amount |
|---|---|---|---|
| $13,333.33 | 30 | 1% | $4,145,427.56 |
| $13,333.33 | 30 | 2% | $3,607,313.55 |
| $13,333.33 | 30 | 3% | $3,162,525.09 |
| $13,333.33 | 30 | 4% | $2,792,816.54 |
| $13,333.33 | 30 | 5% | $2,483,754.89 |
| $13,333.33 | 30 | 6% | $2,223,888.19 |
| $13,333.33 | 30 | 7% | $2,004,100.91 |
| $13,333.33 | 30 | 8% | $1,817,113.26 |