Hold on the new car!

When you are pre-qualified by the mortgage broker or bank , they will estimate your affordability by using 2 simple calculations. One calculations is to add up all your debts. You will be allowed 40% of your gross monthly income in payments on total debts.

If you are considering a significant purchase like a car (or car lease) you can see how the car payments will effect your home buying power! So make sure you buy your home before committing to that lovely car! Of course it would be up to you to decide whether you want to maximize your mortgage payments, but it does keep your options open.

Our experience is that most people end up with more mortgage than they initially budgeted for. Why? Because people budget too optimistically- the ideal home tends to cost that bit more in monthly payments!

The second calculation used is a maximum of 32 % of your gross income on a mortgage payments.(see Mortgage calculations)