Bob and Sally Smith are recently married both age 30 and they want to purchase a house in Nanaimo. They have gross salaries of $55,000 and $65,000 respectively and they have saved $40,000 for a down payment on a house. They are going to RBC bank to arrange a mortgage and the loan officer has indicated she will use a GDS ratio of 32%. If they expect property taxes to cost $300 per month what will their maximum monthly mortgage be? Assume semi-annual compounding.

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