Mortgage Payment Calculator Canada
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Over 40% of Canadians have a mortgage with the median mortgage debt sitting around $200 000. Among 25 to 44 year old, nearly 9 out of 10 homeowners have a mortgage they are paying off.
If you are thinking of buying a home to live in or as an investment property then you will want to use the best Canadian mortgage calculator to help you work out how much debt you can afford to take on and what amortization period you would need to meet payments.
How do you use the monthly mortgage calculator?
Using a mortgage payment calculator is simple! First, you enter the amount you are hoping to borrow for your mortgage. Next, you add the interest rate offered to you by the lender. Thirdly add the amortization period. This is the length of time over which you agree to repay the loan.
Once you have input all the information, the Canadian mortgage rates calculator will tell you how much your monthly payments will be.
The calculator cannot account for rate rises set by the lender. Note that in times of inflation banks may raise mortgage rates.
How much are mortgage interest rates?
Mortgage rates vary from lender to lender. To compare the best deals please see our mortgage rate comparison tool to find the right lender for you and up-to-date rates. However, we can have a look at the current base rates so that you have a rough idea of what to put in the calculator if you are just beginning your research. Below is a table with 4-year fixed rates from Canada's leading lenders in ascending order. Note that rates change quickly. While they were accurate at the time of publication you should confirm them when you're shopping for a mortgage.
|Laurentian Bank of Canada||4.24%|
|Home Trust Co.||4.29%|
|National Bank of Canada||4.59%|
|First National Financial||4.89%|
What should you consider when taking out a mortgage?
The most important thing when taking out a mortgage is to make sure you can meet repayments. If you borrow more than you are ultimately able to pay back then your home may be repossessed. Therefore you need to be confident that you will continue making enough money to make those payments every month. Let's take a look at some of the other things to consider.
The Bank of Canada sets target interest rates eight times a year: in January, March, April, July, September, October and December. In turbulent economic times, it can change rates even between these periods. The interest rates sets by the bank of Canada do not directly affect the rate of interest payable on your mortgage, however, your lender is likely to react to changes made by the BoC.
For example, if there is inflation (a steady rise in the costs of goods and services), the BoC may raise interest rates to discourage borrowing and encourage saving. If the interest rate remains raised, your lender will typically raise the interest rate on your mortgage. They will not be able to do this until the end of the current term. Hopefully, your income will have risen in line with inflation and you will be able to increase the amount you are paying each month without difficulty. This will probably depend on whether you can adjust your own wages or whether you are able to negotiate with your employers.
As with every kind of contract, the best advice is to read closely and read it twice! When taking out a loan it is very important to read the terms and conditions, especially those dealing with late or missed payments. Before you take out a loan you should have a clear understanding of what will happen if you are unable to make a payment. Some lenders will allow you extra time to pay, others will impose punitive fines. You should be clear on what the stakes are!
Again, like interest rates, late-payment policies may change with inflation or if the lender has financial worries of their own.
If you would like more advice with regard to mortgages, get in touch with a financial advisor today.
Are mortgages more expensive in different provinces?
Mortgage lenders operate nationally, so will the prices of property will vary between provinces the rates largely will not. There instead of having a mortgage calculator for BC and another mortgage calculator for Ontario, you only need to use the mortgage home calculator above.
For a closer look at rates across different provinces and the differing values of properties please consult our online comparison tool:
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Good to know
Want to calculate what your mortgage will look like? We have some tools right here on our website that can help:
Our mortgage affordability calculator will help you determine how large a mortgage you can get.
Our mortgage default insurance calculator will tell you how much you'll owe for mortgage default insurance