Problem
Clementine is planning to buy a house. The current interest rate for a 5-year fixed mortgage is 3.2%, She earns $126,000 per year. Property taxes are estimated at $3,000 per year, electricity is estimated at $90 per month, and heating is estimated at $140 per month.
• What is the maximum mortgage she would qualify for when the stress test is applied?
• What would her mortgage payment be at a rate of 3.2% for a 25-year amortization?