Mortgage Payment Calculator
Before you begin shopping for a home or property, you need to get a clear picture of how much your monthly payments would end up costing. This calculator will make that a snap!
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DISCLAIMER
This calculator is for illustrative purposes only. While every effort is made to keep this tool up-to-date, Simple Mortgage does not guarantee the accuracy, reliability or completeness of any information or calculations provided by this calculator. Simple Mortgage is not be liable for loss or damage of any kind arising from the use of this tool.
Down Payment
Your down payment is how much cash you’ll be putting down on your new home, and the remainder is what you will finance. Your minimum down payment will be determined by the purchase price of the property. You can follow these guidelines to help you determine your down payment:
- If you are purchasing a property that is under $500,000, the minimum down payment you can put down is 5% of the purchase price.
- If the purchase price is between $500,000 an $999,999, the minimum down payment is 5% of the first $500,000 and 10% of the remainder.
- If your purchase price is $1,000,000 and up, the minimum down payment is 20% of the purchase price.
- Sometimes, higher down payments are required, such as if you have poor credit or if you’re self-employed.
less than 20% will require an additional expense of mortgage default insurance, which also means your amortization period cannot exceed 25 years.
Default Insurance Calculations
Amortization
Your amortization period refers to the amount of time it will take you to pay off your mortgage.The most common amortization period in Canada is 25 years. Amortization periods that are less than 25 years will reduce the interest you will pay overall, however, it will also increase your payments. Amortization periods over 25 years require a minimum down payment of 20%.
CMHC Insurance
Canada Mortgage and Housing Corporation (CMHC) insurance is also known as mortgage default insurance. It protects the lender should you default on your mortgage. All mortgages that are acquired with a down payment that is less than 20% are required to purchase CMHC insurance under the Office Superintendent of Financial Institutions (OSFI) regulations. CMHC insurance costs are calculated based on your down payment. Rates are typically between 2.5% to 4% of the purchase price.
Interest Rate
Your interest rate is the amount of interest that is added to the unpaid portion of your loan. Obviously, you’ll want the lowest interest rate you can get in order to reduce not only your monthly payments but also the lifetime cost of your mortgage.
There are two different types of interest rates:
Fixed
A fixed interest rate will never go up or down for the length of the mortgage term (contract).
Variable
A variable interest rate can fluctuate during the mortgage term. Your payment will remain the same for the term, however, it will adjust the percentage of your payment that goes toward paying off your principal. Variable rates are controlled by the Prime Rate set by your lender but are typically based off of the Bank of Canadas Policy Interest Rate.
Although it is impossible to predict whether interest rates will rise or fall, a variable rate can benefit you if they do fall. On the other hand, it can certainly work against you if they rise. For this reason, fixed rates are usually the safer way to go.
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