For most homeowners a mortgage represents the largest debt of their lifetime. That’s why it crucial to do your homework and ensure your mortgage fits within your budget. There are many helpful calculators out there that can help you figure out everything from your mortgage payments to CMHC insurance premiums. If your goal is to pay down your mortgage sooner rather than later and become mortgage-free, it’s essential that you understand how to use a mortgage calculator.
A mortgage payment calculator is the most basic calculator for homeowners. It answers the basic and important question of whether your mortgage will fit within your household budget. Have you ever wondered whether you’d be better off putting five per cent or 10 per cent down? Mortgage payment calculators are so powerful because they allow you to run various scenarios and analyze their results. If you have a variable rate mortgage, you can see how a 50 basis point increase in prime rate will affect the amount that goes towards principle and interest and how much longer your amortization period may be extended.
To start using the calculator, you have to enter basic information about your home. Start by entering the asking price of your home – the calculator will display your mortgage with different down payments – five per cent, 10 per cent, 15 per cent, and 20 per cent, as well as what your mortgage insurance would be under each scenario. Next you’ll need to enter your amortization period – unless you plan to pay off your mortgage early, for most homeowners it will be 25 years. Next you’ll need to select your mortgage rate – you can select mortgage rates based on what’s currently being offered in the marketplace or a custom rate. Your mortgage rate is essential, as it affects how much of your mortgage payment goes towards principle and interest. You can also find out helpful information, including closing costs, monthly expenses, interest rate risk, and your amortization schedule.
The following Mortgage Calculators allow you to test different variables and make informed financing decisions. Our calculators take into account the total cost of home ownership, are easy to use:
Mortgage Payment Calculator
Use this calculator to test different scenarios and determine your ideal monthly payments. Our innovative chart shows you exactly what your monthly payment will be and how much you contribute each year to Principal, Interest and Total Balance due. Using different variables and scenarios you can visually see the effect on your mortgage to reduce the amount and amortization according to your needs.
Mortgage Affordability Calculator
The affordability calculator can help you decide how much mortgage you can afford to borrow and ultimately re-pay. Affordability is based on your (household) income, the monthly expenses you have (car, credit cards, etc) and other costs associated with owning a home such as property taxes, heating costs and condo fees (in the case of a condominium). To get an accurate estimate you need to try to estimate all these things as closely as possible. The calculator is also useful to run simulations to see if you could afford more in certain situations.
Buying vs. Renting Calculator
A lot of Canadians are asking themselves if it's a good time to buy a property. This calculator can be helpful to determine if buying a home is the right decision and investment for your family. For most people buying makes sense, but that logic doesn't apply to everyone. You need to evaluate your personal situation and decide if buying is the right decision for you.
CMHC Mortgage Calculator
For homeowners with less than a 20 per cent down payment, you’ll need to purchase mortgage insurance. Commonly referred to as CMHC insurance, homebuyers with less than a 20 per cent down payment (called high ratio mortgages) are considered a higher risk of default to lenders. To allow lenders to still offer competitive mortgage rates to homebuyers with a down payment between five per cent and below 20 per cent, mortgage insurance compensates the lender if you default on your lender. It’s a win-win situation for lenders and homebuyers – lenders are protected from default and homeowners are able to purchase a home with as little as five per cent down and still get an attractive mortgage rate.
Similar to the mortgage payment calculator, you start by entering the asking price of your home. You can then choose your down payment under various scenarios – five per cent, 10 per cent, 15 per cent and 20 per cent – along with your amortization period. The calculator will then display the total amount of mortgage insurance you’ll need, along with your new total mortgage including mortgage insurance. This helps give you the full pictures by showing how much mortgage insurance can increase the total cost of homeownership. Mortgage insurance is added onto your total mortgage and amortized over the life of your mortgage, so you can end up paying a lot more interest because of it.