TORONTO, ONTARIO--(Marketwired - Jul 24, 2013) - As part of BMO Financial Group's ongoing commitment to financial literacy and 'Making Money Make Sense', BMO is releasing financial tips throughout the summer to help Canadians make the 'BMOst of summer' in 2013.
BMO's Tip of the Day: Stick to the "One-Third Rule" when planning the purchase of a home this summer.
If you're assessing whether or not a new home is financially realistic for you this summer, keep in mind that housing costs - including mortgage payments, utilities and taxes - should not take up more than one-third of your total household income.
"If you can land safely within these parameters, then homeownership is an affordable and realistic option," said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "Also, ensure you're financially prepared for a potential rise in interest rates down the road by stress-testing your mortgage against a higher rate."
Ms. Parsons added that it's also wise to choose a shorter amortization, which can help you save thousands of dollars in interest over the life of the mortgage and allow you to begin building equity in your home faster.
For those looking to buy a home this summer, try the BMO Mortgage Calculator to determine how much you can realistically afford.
BMO offers a number of products and services that can help Canadians get more out of every dollar they spend this summer. For more details on how to make the 'BMOst of Summer,' drop by a BMO branch or visit www.bmo.com.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $555 billion as at April 30, 2013, and more than 46,000 employees, BMO Financial Group provides a broad range of personal and commercial banking, wealth management and investment banking products and solutions.