Consumer math Worksheet
Mortgage payment & GDSR calculations
Solutions
Jason Mink would like to buy a house for $240,000. He is able to make a down payment of 20%.
The bank will finance this property at a rate of 8.75% over 25 years. His annually gross income is
$84,000. The monthly property taxes are $445 and monthly utility costs are $100. He does not
have other debt.
Calculate: a) The monthly mortgage payment b) The gross debt services ratio. c) The total
interest in the five years. d) The total principal paid in the five years. e) The total mortgage
remained after five years. (Using Excel to calculate question c, d, and e.)
Solution:
a) The monthly mortgage payment.
Step1, down payment = $240,000  20%  $48,000
The total Mortgage = $240,000  $48,000  $192,000
Step2, check Table 4 Amortization Table (page 27 Essential Mathematics 12)
The amortization factor, with 8.75% Interest rate over 25 years, is $ 8.12 per $1000
mortgage.
$8.12  $192,000
 $1559.04
$1000
b) Step1, his monthly income is: $84,000 12  $7,000
Monthly mortgage payment 
Step2, The gross debt services ratio
monthly mortgage payment  monthly property payment  monthly heating cos ts
100%
gross monthly income
$1559.04  $445  $100

100%  30.06% less than 32%
$7000
Since the gross debt service ratio is 30.06% (less than 32%), and he does not have other debt his
application would likely be accepted.

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Consumer math Worksheet
Mortgage payment & GDSR calculations
Solutions
Solutions: c),d), and e)
House price
Downpayment
Mortgage
Interest rate
Amotization factor
Monthly payment
Number
Payment
Monthly
payment
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
th
$240,000
$48,000
$192,000
8.75%
$8.12
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
20% of the house value
25 years Amortization period
per $1000 mortgage
Interest
Payment
$1,400.00
$1,398.84
$1,397.67
$1,396.50
$1,395.31
$1,394.12
$1,392.91
$1,391.70
$1,390.48
$1,389.25
$1,388.02
$1,386.77
$1,385.51
$1,384.25
$1,382.97
$1,381.69
$1,380.40
$1,379.09
$1,377.78
$1,376.46
$1,375.13
$1,373.79
$1,372.44
$1,371.08
$1,369.70
$1,368.32
Principal
Payment
Unpaid
balance
Owner's Equity
$159.04
$160.20
$161.37
$162.54
$163.73
$164.92
$166.13
$167.34
$168.56
$169.79
$171.02
$172.27
$173.53
$174.79
$176.07
$177.35
$178.64
$179.95
$181.26
$182.58
$183.91
$185.25
$186.60
$187.96
$189.34
$190.72
$192,000.00
$191,840.96
$191,680.76
$191,519.39
$191,356.85
$191,193.12
$191,028.19
$190,862.07
$190,694.73
$190,526.17
$190,356.39
$190,185.36
$190,013.09
$189,839.56
$189,664.77
$189,488.70
$189,311.35
$189,132.71
$188,952.76
$188,771.50
$188,588.92
$188,405.01
$188,219.75
$188,033.15
$187,845.18
$187,655.85
$187,465.13
$48,000.00
$48,159.04
$48,319.24
$48,480.61
$48,643.15
$48,806.88
$48,971.81
$49,137.93
$49,305.27
$49,473.83
$49,643.61
$49,814.64
$49,986.91
$50,160.44
$50,335.23
$50,511.30
$50,688.65
$50,867.29
$51,047.24
$51,228.50
$51,411.08
$51,594.99
$51,780.25
$51,966.85
$52,154.82
$52,344.15
$52,534.87
th
The 27 to 60 month Continue on the next page.
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Consumer math Worksheet
Mortgage payment & GDSR calculations
Solutions
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
Total in
5 years
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$1,559.04
$93,542.40
Mortgage
payment
Learning Assistance Center
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$1,366.93
$1,365.53
$1,364.12
$1,362.70
$1,361.27
$1,359.83
$1,358.37
$1,356.91
$1,355.44
$1,353.95
$1,352.46
$1,350.95
$1,349.43
$1,347.90
$1,346.37
$1,344.81
$1,343.25
$1,341.68
$1,340.09
$1,338.50
$1,336.89
$1,335.27
$1,333.64
$1,331.99
$1,330.34
$1,328.67
$1,326.99
$1,325.30
$1,323.60
$1,321.88
$1,320.15
$1,318.41
$1,316.65
$1,314.89
$81,625.33
Interest
payment
$192.11
$193.51
$194.92
$196.34
$197.77
$199.21
$200.67
$202.13
$203.60
$205.09
$206.58
$208.09
$209.61
$211.14
$212.67
$214.23
$215.79
$217.36
$218.95
$220.54
$222.15
$223.77
$225.40
$227.05
$228.70
$230.37
$232.05
$233.74
$235.44
$237.16
$238.89
$240.63
$242.39
$244.15
$11,917.07
Principal
payment
Prepared by Mh. Xu
[email protected]
$187,273.02
$187,079.52
$186,884.60
$186,688.26
$186,490.49
$186,291.27
$186,090.61
$185,888.48
$185,684.87
$185,479.79
$185,273.20
$185,065.11
$184,855.51
$184,644.37
$184,431.70
$184,217.47
$184,001.68
$183,784.32
$183,565.38
$183,344.83
$183,122.68
$182,898.91
$182,673.51
$182,446.47
$182,217.76
$181,987.40
$181,755.35
$181,521.61
$181,286.16
$181,049.00
$180,810.11
$180,569.48
$180,327.09
$180,082.93
$52,726.98
$52,920.48
$53,115.40
$53,311.74
$53,509.51
$53,708.73
$53,909.39
$54,111.52
$54,315.13
$54,520.21
$54,726.80
$54,934.89
$55,144.49
$55,355.63
$55,568.30
$55,782.53
$55,998.32
$56,215.68
$56,434.62
$56,655.17
$56,877.32
$57,101.09
$57,326.49
$57,553.53
$57,782.24
$58,012.60
$58,244.65
$58,478.39
$58,713.84
$58,951.00
$59,189.89
$59,430.52
$59,672.91
$59,917.07
Unpaid Balance
Owner’s
Equity
P3-3