Harry is a full-time retail store manager earning a gross income of $85,000 per annum. He's planning
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Question:
Harry is going to get a mortgage from the bank his friend recommended, which offers a 5-year fixed-term mortgage at a rate of 3.15% per annum. He would get a 25-year amortization and make monthly payments.
Round to second decimal place (e.g., 1.23)
Required:
Estimate the amount of home that Harry can afford, based on his gross income, expected expenses, the TDS ratio of 40%, current mortgage rate, and down payment. (10 marks)
Ignore other restrictions (e.g., GDS, stress test) for this question.
What is the outstanding balance after five years on the mortgage? (5 marks
If he decided to renew the mortgage at the rate of 4.5% after five years, what is the new monthly payment amount?
Related Book For
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
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