Question #2: Mortgages and Home Buying. Assume your family income is $180,000, your average tax rate is 25%, you have $100,000 saved-up for a down-payment on a house, and that you have no other liabilities or obligations. You are looking to buy a house that costs $X, and plan to finance the purchase of this house. The annual property tax on a house worth $X, is exactly 0.75%. Your monthly mortgage payment plus monthly property tax payment is not allowed to exceed one third of your disposable income. The mortgage interest rate for a 25-year period amortization period is 4% (APR) with monthly compounding. If your debt-to-equity ratio is greater than 5-to-1, then you must purchase CMHC insurance by paying an additional 1.25% of the value of the loan, which is then amortized over the period over the loan and blended into your monthly payment. What is the most expensive house you can purchase (i.e. the largest value of X)