Posted on: 15-08-07 12:24:13
Average Joe has a gross annual income of $75,000 per year
- Has $20,000 for a down payment
- The mortgage interest rate is 6%
- Amortization is over 25 years
- Monthly property taxes are $200
- Heating costs are $100 per month
- $200 monthly car loan payment.
Results of the CMHC Calculator:
- Joe Hoop can afford a home worth $280,000
- Paying $1,700 a month in mortgage payments.
Joe is paying $1700 a month for his house out of a net income of $3400 per month after tax......
The other $1700 goes to his car payment ($500) gas ($200) insurance ($100) food ($500) entertainment ($400) Credit card debt ($??).....no savings, no RRSP.
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It sounds like anyone who owning the house around or above 300K-350K are making in 6 figures and any damm condo/house are in that price.
There only 4% people who having earning more than 100K in Calgary as per tax filing in 2006.
Rahul Sir,
First, is this your calculation? If not please give due credit to whoever has posted this wherever on the net.
Second, gross annual income of 75 K leaves you with $4666 or 56K after taxes in the province of Alberta. Check this http://www.ey.com/GLOBAL/content.nsf/Canada/Tax_-_Calculators_-_2007_Personal_Tax
So what happens to the extra $1000? what about the capital gains on the property? What about the principal payment of the loan? Secondly do you think the salary if going to remain at 75 K over the years? Would it not go up and hence increasing the net disposable income. Would the interest rates rise significantly? Doubtful.
Quote:
Originally posted by rahul_singh23
Average Joe has a gross annual income of $75,000 per year
- Has $20,000 for a down payment
- The mortgage interest rate is 6%
- Amortization is over 25 years
- Monthly property taxes are $200
- Heating costs are $100 per month
- $200 monthly car loan payment.
Results of the CMHC Calculator:
- Joe Hoop can afford a home worth $280,000
- Paying $1,700 a month in mortgage payments.
Joe is paying $1700 a month for his house out of a net income of $3400 per month after tax......
The other $1700 goes to his car payment ($500) gas ($200) insurance ($100) food ($500) entertainment ($400) Credit card debt ($??).....no savings, no RRSP.
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It sounds like anyone who owning the house around or above 300K-350K are making in 6 figures and any damm condo/house are in that price.
There only 4% people who having earning more than 100K in Calgary as per tax filing in 2006.
Quote:
Originally posted by rahul_singh23
Average Joe has a gross annual income of $75,000 per year
- Has $20,000 for a down payment
- The mortgage interest rate is 6%
- Amortization is over 25 years
- Monthly property taxes are $200
- Heating costs are $100 per month
- $200 monthly car loan payment.
Results of the CMHC Calculator:
- Joe Hoop can afford a home worth $280,000
- Paying $1,700 a month in mortgage payments.
Joe is paying $1700 a month for his house out of a net income of $3400 per month after tax......
The other $1700 goes to his car payment ($500) gas ($200) insurance ($100) food ($500) entertainment ($400) Credit card debt ($??).....no savings, no RRSP.
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It sounds like anyone who owning the house around or above 300K-350K are making in 6 figures and any damm condo/house are in that price.
There only 4% people who having earning more than 100K in Calgary as per tax filing in 2006.
Mr Average Joe,
What is the $500 for car payment. If it is the loan repayment, you just mentioned $200 towards monthly loan payment or is it $200 loan + $200 gas + $100 insurance = $500
Spending $400 on monthly entertainment - guess it's time you rethink about that one.
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SS
Reiki Grand Master
I tried to put general idea or very general expense.
There are lots of expenses that we did not mention like school fees, day care, trip to India, vacations, relocation, clothes, kids stuff, family/parent visiting, big purchases. This can be a long list.
Here bottom line is what is the price of home practically a 75K salary person can afford?
A colleagues’ friend of mine that is employed at BMO Edmonton said that all of their branch representatives are being made to take a seminar on mortgage foreclosures and bankruptcy.
rahul_singh23:
I would take the results of the affordability calculator as a guideline.
Its an individual choice to get a house that strains your finances completely without any savings except the built up equity (which is an unrealized gain that is not of any use until you sell the house) OR make sure that you get a lower priced house and save the extra money / use it for something else you think is important for you.
You just got to pick what is right for you !
Quote:
Originally posted by rahul_singh23
I tried to put general idea or very general expense.
There are lots of expenses that we did not mention like school fees, day care, trip to India, vacations, relocation, clothes, kids stuff, family/parent visiting, big purchases. This can be a long list.
Here bottom line is what is the price of home practically a 75K salary person can afford?
A colleagues’ friend of mine that is employed at BMO Edmonton said that all of their branch representatives are being made to take a seminar on mortgage foreclosures and bankruptcy.
Quick question. What's the purpose of starting so many posts basically trying to prove just one point? That the housing market is inflated and a crash is imminent?
What do you do for a living?
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Are you there?
It’s just a discussion we are not bashing out anyone personally. Me and my wife we both are in IT.
