Like every Canadian couple, Monir and Jackie carry quite a lot of debt, despite their high income. Both lease their cars at a combined cost of $2,300 a month. Their recently-built house carries a $1,000,000 mortgage at a rate of 2.4%, 5-year term, with monthly payments over 25 years. Theirs was not a conventional mortgage, but a high-ratio mortgage at a 90% loan-to-value ratio. Other monthly debt charges (line of credit, credit card, etc.) amount to $5,000 a month. Municipal taxes and heating costs amount to $900 a month. They were First Time Home Buyers.

Part 1 (2 marks) The couple chose to add the CMHC mortgage loan insurance to their $1,000,000 fixed rate mortgage. However, had they paid the insurance off up-front, how much total interest would they have saved over 25 years? Mortgage Insurance Calculation

Part 2 (2 marks mark each) The couple drew down $80,000 from their RRSPs on July 15 of 2021 under the Home Buyers Plan (Monir had been an employee in a prior career and had made contributions). Identify 4 requirements they would have had to meet to qualify for the HBP. HBP Criteria

Part 3 (2 marks) What is the couples Total Debt Service Ratio (TDS)? Ignore Monirs capital gains/losses. Calculation of mortgage payment (rounded to nearest dollar) Calculation of TDS

Part 4 (1 mark) Monir drives a Range Rover that, at the time of signing of the lease, sold for $125,000. Assuming Monir made a $5,000 down payment. Other than a low down payment, identify two advantages of leasing versus purchasing a car. Advantages of Leasing versus Purchasing