Brad and his wife Paige have just moved to Ireland from China and want to buy a house that costs 900000. They have a down payment of $200,000 plus enough to pay the other costs like legal fees and moving cost. They go to Irelands newest bank, the Bank of Belfast (BOB) to get a mortgage. They negotiated a fixed rate of 3.1% p.a. with a 25-year amortization and a 5-year term - but then the loan officer tells them they will have to make sure they can qualify for the mortgage under the new rules just brought in by the King of Belfast , which has just declared independence from Ireland. The new rule is to prevent borrowers getting in too deep: they must meet a standard of GDS of 30% and TDS of 40% and qualify at a mortgage rate that is 2.4 percentage points higher than they are actually paying. The estimated utilities expense (electricity, water, waste management) is $300 per month and gas for heating is approximately $210 per month. The property tax for the next year is $350 per month. They estimate they would need no more than 1200 next year for maintenance. Paiges new job in Ireland will pay her $100,000 p.a. as a consulting neurologist, while Brad will be working as a teacher for $60,000 p.a. They are still repaying Paiges students loans from her degree in China at a rate of $400 per month. They had to buy a car when they came to Ireland and the car loan payments are $450 per month.

Calculate the monthly mortgage payment they need to be approved of to purchase the home and Calculate GDS and TDS ratio: