Mortgage Calculator


Mortgage Calculator

How much of a mortgage can you afford? You don’t have to guess. With our online mortgage calculator, you can work with various payment scenarios, down payments, amortization periods, etc. to determine what you can afford or how much more you might need to save in order to get into the home of your dreams.

Before you use our mortgage calculator

Before you use our mortgage calculator, it is a good idea to review your annual household income and expenditures.   You may have multiple income earners in your household that will be contributing to your monthly or bi-weekly mortgage payments, but you also need to consider how well you would be able to make those payments without those additional income earners.

You also need to consider how your expenditures will change once you are in a home of your own. If you are currently paying rent, you won’t need to worry about that anymore, but there will be new expenses such as household repairs and maintenance, home insurance, and property taxes.

Calculate your down payment

The higher your down payment, the lower your regular mortgage costs will be.  If your down payment is less than 20% of your total mortgage you will also need to purchase mortgage default insurance. Keep in mind, there are also a number of programs that can help you with your down payment including the Home Buyers’ Plan (HBP), which allows first time home buyers to borrow from the RRSPs. (Your mortgage broker can help you with this).

If you need to make your mortgage payments more manageable, choosing a longer amortization period can help. But if you can afford to make larger payments, a shorter amortization period will save you considerable money in interest payments over the longer term.

Mortgage type

You will also need to choose between a fixed rate mortgage and a variable rate mortgage. Most Canadians choose fixed rate mortgages because of their predictability. With a fixed mortgage, you know that your interest rates will never increase for the term of the mortgage.

On the other hand, if you are comfortable with a little volatility, then selecting a variable rate mortgage can also be beneficial. Variable rate mortgages usually have somewhat lower interest rates than fixed rate mortgages (which can actually save you a lot of money). The downside is that if the band interest rate goes up, then your variable interest rate will go up with it.

Mortgage term

The most common mortgage term in Canada is a five-year term, however you can also get terms as short as one year or as long as ten years. If you only plan on living in your home for a short time, then a shorter term mortgage may be more beneficial so that you don’t have to pay a penalty for breaking it. You may also wish to choose a shorter term if you are getting a mortgage with a private lender and anticipate improving your credit score and being able to qualify for a better interest rate in a few years.

A longer term mortgage may be good if you wish to lock in a particular interest rate, but keep in mind longer term mortgages generally have higher interest rates to start with.

Contact us today!

If you have questions about our mortgage calculator or would like the help of a professional mortgage broker to determine what you can afford, give us a Call today.