If you want to be a true pessimist
(1) Take the lower of the two incomes and pretend it isn't there. Buy a house you can afford on the single income, rather than on both incomes combined. Illness, parental leave, unemployment is hard to account for, but dropping the lower salary would be the largest risk factor.
(2) Be pessimistic, assume inflation and whether you can continue to afford your home at 8% interest rates.
(3) Don't forget realistic heating costs; they may continue to rise. Add 25% to the gruesome heating costs of 2007-2008 for heating/cooling.
For example, if you type into the CMHC calculator 12000 Gross Monthly Household Income, A Down Payment of 40000, with a 5% interest rate amortized over 35 years, with property taxes of 300 and heating costs of 200 (assuming no other debts) ... the calculator says you can probably handle a 3340 mortgage payment and a $700K home.
Changing the gross monthly income to 8000, upping the interest rate to 8% from 5% and increasing the heating costs to 250 only preapproves you for a $326000 home.
That feels more correct to me.
(1) Take the lower of the two incomes and pretend it isn't there. Buy a house you can afford on the single income, rather than on both incomes combined. Illness, parental leave, unemployment is hard to account for, but dropping the lower salary would be the largest risk factor.
(2) Be pessimistic, assume inflation and whether you can continue to afford your home at 8% interest rates.
(3) Don't forget realistic heating costs; they may continue to rise. Add 25% to the gruesome heating costs of 2007-2008 for heating/cooling.
For example, if you type into the CMHC calculator 12000 Gross Monthly Household Income, A Down Payment of 40000, with a 5% interest rate amortized over 35 years, with property taxes of 300 and heating costs of 200 (assuming no other debts) ... the calculator says you can probably handle a 3340 mortgage payment and a $700K home.
Changing the gross monthly income to 8000, upping the interest rate to 8% from 5% and increasing the heating costs to 250 only preapproves you for a $326000 home.
That feels more correct to me.