David and Lilah want to spend no more that 40 percent of their gross income on housing. David makes $80,000 per year as a teacher and Lilah makes $100,000 as an analyst. Property taxes and condo fees total $3,000 per month. David and Lilah will finance their purchase with a 5-year, 5% fixed-rate mortgage loan, with a 25-year amortization period. They have saved up $35,000 to use as a down payment for a condo. CMHC premiums on mortgage insurance are given in the table below.

How much can Lilah and David spend on their condo (price of the condo)?

CMHC Premiums: Loan to Value Premium Up to 65% 1% From 65.01% to 75% 2% From 75.01 to 85% 3% From 85% to 95% 4%