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?
Part b
How much will CMHC loan insurance cost?
Part c
What will be the couple’s monthly mortgage payment and loan balance at the end of their term?