Mini-Case B (7 marks) 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 Buyer's 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 Page 9 of 13 Part 3 (2 marks) What is the couple's Total Debt Service Ratio (TDS)? Ignore Monir's capital gains/losses. Calculation of mortgage payment (rounded to nearest dollar) Calculation of TDS Title 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 The End TABLE A 2020 Combined Federal and Quebec Personal Income Tax Brackets and Tax Rates 2020 Taxable Income 2020 Tax Rates 2020 Taxable Income 2020 Tax Rates first $44,545 27.53% over $97,069 up to $108,390 45.71% over $44,545 up to 32.53% over $108,390 up to $150,473 47.46% $48,535 over $48,535 up to over $150,473 up to 37.12% 50.15% $89,080 $214,368 over $89,080 up to 41.12% over $214,368 53.31% $97,069 TABLE B 2020 Federal Basic Personal Amount and Quebec Basic Personal Amount 2020 Federal Basic Personal Amount 2020 Quebec Basic Personal Amount $13,229 $15,532 Tax rate 15% Tax rate 15% TABLE C Tax-Free Savings Account (TFSA): Annual Limits Years Annual Limit Years Annual Limit Year started 2009 - 2012 $5,000/year 2016-2018 $5,500/year 2013 - 2014 $5,500/year 2019-2020 $6,000/year 2015 $10,000/year 2021 $6,000/year TABLE D Registered Retirement Savings Plan (RRSP): Annual Limits Formula for RRSP contr Title mit: 18% of your previous year's earned income less your previous nsion adjustment to an annual maximum. Year Annual maximum contribution limit 2018 $26,230 2019 $26,500 2020 $27,230 2021 $27,830 TABLE E Home Buyer's Plan (HBP) Page 12 of 13 Withdrawals made after March 19, 2019 Withdrawals made prior to March 19, 2019 . Withdraw up to $35,000 per borrower and up to $70,000 per couple. Withdraw up to $25,000 per borrower and up to $50,000 per couple. . 15 years to pay back the amount withdrawn 15 years to pay back the amount withdrawn TABLE F
