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Canadian House Affordability Calculator
u/FirstTimeBuyer · Joined Oct 2024
Banks suggest borrowing 4x or 5x your income, but what works for you? Discover how housing costs affect your finances and long-term investment impact.
Last update Nov 2024
- Scenario 1: Financial Impact Curve
This chart links housing affordability to your financial outlook, showing how costs over disposable income impact your potential investments. It **excludes home equity**, focusing on wealth dips or gains to suggest affordability.
# Years from Now
Try your numbers:
Enter your total annual household income before taxes. This is the basis for evaluating affordability and determining how much of your earnings can sustainably cover housing and other expenses.
A =
Enter the total cost of the house you’re considering. This value determines the mortgage amount and property tax, key contributors to your recurring housing expenses.
B =
Enter the percentage of the house price you’ll pay upfront (min 5%). Less than 20% adds CMHC insurance costs. Higher down payments lower loan size and monthly payments, improving affordability.
C =
Enter the annual interest rate for your mortgage loan. This directly affects your monthly mortgage payment and the total cost of homeownership over time.
D =
Enter your current monthly property maintenance costs and the expected annual percentage increase. This includes recurring expenses like repairs and upkeep, adjusted for inflation or market trends over time.
Ẽ =
Enter the annual tax rate as a percentage of your house price. Property taxes are a recurring cost that scales with the house value and influences affordability; the amounts typically track inflation for municipal and school services.
F =
Enter your average monthly non-housing expenses, such as groceries, utilities, and entertainment, along with the expected yearly growth rate. These inputs ensure accurate projections for total spending over time.
G̃ =
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- AmountAny single amount ($).
- Cash FlowRent, insurance premium, salary, ...
- Current AssetReal estate, commodity, bonds, ...
- Installment LoanMortgage, car loan, ...
- PercentageAny percentage value (%).
- Years / MonthsAny time horizon.
- AgeShow "Age" instead of "# Years from Now."
- Retirement Age (requires Age)Enable "Investment Return After Retirement."
Time Value Assumptions
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How is Cash Value calculated?
This scenario calculates the impact of housing costs on your disposable income and potential investments over time. It accounts for your mortgage payments, maintenance fees, property taxes, and other spending, adjusting for annual increases. The calculation excludes home equity and focuses on whether your financial position dips or grows, helping to evaluate housing affordability and long-term wealth impact.
Decisions / Expectations
(Expressions are evaluated at Year 0 only.)
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Calculations
(Expressions are evaluated at every year.)
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- Buy AssetBuy an asset growing at its own rate.
- Take Installment LoanTake a mortgage, loan, etc.
- InvestReceive/Spend a lump sum.
- Expect to InvestExpect to receive/spend a lump sum.
- Expect Monthly Cash FlowExpect to receive/spend cash monthly.
- Expect Yearly Cash FlowExpect to receive/spend cash yearly.
- Define Variable (Numerical)Calculate an intermediate value.