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Mr. Smith is considering to purchase a townhouse in Vancouver area. Ms. Angel is approaching Mr. Smith as a real estate broker to help Mr.

Mr. Smith is considering to purchase a townhouse in Vancouver area. Ms. Angel is approaching Mr. Smith as a real estate broker to help Mr. Smith to select, negotiate and purchase the property. Mr. Smith finally signed Purchase agreement for a townhouse in Fraser Valley area at the purchase cost of Cnd$1.2million just recently, the completion date will be 01June2021; Mr. Smith decided to go to Bank B for his mortgage, the mortgage brokerage manager Ms. Catherine greeted Mr. Smith and introduce him for the following mortgage information:

  1. Bank B can offer the maximum loan amount (mortgage amount) either capped at 6times of Mr. Smith taxable income 2020 or 65% of townhouse purchase price; in this case, Mr. Smith annual taxable income 2020 was cnd$100,000;
  2. The mortgage rate nominal is 2% per annum, and financial institution in Canada is allowed to quote the rate at semi-annual compounding;
  3. The mortgage will be paid monthly;
  4. Ms. Catherine offered Mr. Smith the amortization period of 25 years, which Mr. Smith agreed with;

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