To help you figure out the real costs of buying a home - and determine exactly how much home you can afford - Canada Mortgage and Housing Corporation (CMHC) has a number of other "rules of thumb" you can use to calculate the maximum house price you can afford, the maximum mortgage amount you can afford to borrow, and your monthly mortgage payments:

1. The first rule is that your monthly housing costs shouldn't exceed 32% of your gross monthly household income. These housing costs include your monthly mortgage payments, as well as taxes, heating and, if applicable, half of your monthly condominium fees. In other words, if your monthly household income is $4,000, then your total monthly housing costs shouldn't be higher than 32% of that amount, or $1,280.

2. Second, your entire monthly debt load shouldn't be any higher than 40% of your gross monthly income. This includes your housing costs, as well as such other debts as car payments, personal loans, lines of credit and credit card payments. In the example above, this would mean that your total monthly debt load - including your mortgage payments - shouldn't exceed 40% of $4,000, or $1,600.

3. Finally, you should also plan to set aside at least 1.5% of the purchase price to cover other up-front or closing costs that you may incur when buying a home. These can include legal fees, GST and PST, land transfer taxes, survey and home inspection fees, water quality and Estoppel certificate fees, appraisal fees, mortgage broker's fees, moving expenses and service hook-up fees.