Anusha and Naveen are planning to buy their first home. They have saved $30,000 and will withdraw the maximum from their RRSPs under the Home Buyers' Plan. They will pay the cost of CMHC mortgage loan insurance separately. They estimate closing costs at $8,200 and will take a 25-year mortgage at a rate of 3.2%, compounded semi-annually, for a 3-year term. They will pay the mortgage monthly. The home they wish to buy costs $450,000.
Part a
How much of a mortgage loan will the couple need?
Mortgage loan calculation
450 000$ -30 000$ = 420 000$ -25 000( RRSPs) =395 000$ + 8200( Closing costs) = 403 200$