Why I Will Never Be Able To Own Property

Because I am a glutton for punishment, I filled out the “how much of a mortgage can you afford?” calculator on the Royal Bank’s website.  This is what I got:

Mortgage calculator

So, the bank is willing to lend me somewhere between $68 and $71 to buy a home. I feel so honoured that they feel I could pay this vast sum back within the 35 YEAR amortization that I had to choose in the calculator in order not to receive a “we cannot calculate anything at all for you, you poverty-stricken loser” error message.  I especially love that they figure I can afford $71 paid back over 35 years if I have a downpayment of $30,000.  I mean, if I’m so poor that I can only afford about a one cent per month mortgage payment1, where do they think I’m getting a $30,000 down payment from?

And huzzah!:

Save $12

I could save 12 whole dollars if I make accelerated bi-monthly payments.  I mean, I can’t afford not to!

I guess I’ll check again in about 5 years when my student loans are paid off. Maybe then they’ll let me get a mortgage and I’ll only be slightly into my retirement by the time my mortgage is paid off. Sigh.

I guess I should have taken them seriously when I saw this message before I started the calculator:

You might be surprised

Surprised indeed.  Or, you know, depressed.  Whatevs.

  1. I don’t know what they actually think the monthly payment would be, because it’s been rounded off to $0 []

5 Replies to “Why I Will Never Be Able To Own Property”

  1. Hey Beth,

    I thought I’d check this out to see what I might get and at first I had the same dismal results (despite already having a mortgage with RBC). Then I noticed that the housing costs need to be entered as monthly, and I had entered the total for the year by mistake. That seemed to fix things for me. Hopefully that improves your results as well.

  2. Gah! Why won’t your blog let me post?! I want to say this:

    That is hilarious, but it cannot possibly be right. Just to see, I went to the TD Canada Trust “How much can I afford” tool, and plugged in your numbers (based on conversations we’ve had on debt repayment — I ballparked it). Based on that (and down payment of $20k), they will lend you $180k for a property with a 25 year amortization, bi-weekly payments of $783.

    What calculator did you use?

  3. @Dan – Nope, I put in the housing costs as monthly! The problem is my student loan debt, combined with the fact that RBC calculator counts your credit card and line of credit limits as if you owe all that money, which I don’t. I don’t carry a balance on my credit cards and I’ve never once touched my line of credit (I got it as a safety net when I thought I was going to be postdoc and might need it until my postdoc paycheques were set up). When I use the Vancity calculator, which just asks how much you owe, not what your limits are, I can get more, but still not enough to buy anything in Vancouver.

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