The table below is a great way of estimating a monthly mortgage payment for Canadian mortgages. We calculate the payment per $100,000 borrowed; then you can easily do the math. For example, for a $200K mortgage - just double the payment factor! AND, you just have to remember ONE number while you house shop and do the math on the fly!
Instructions:
For example, $100,000 borrowed at 3.50% and amortized over 25 years will have a monthly payment of $499. Now just remember that number while you house shop!
Example for a $400,000 mortgage, the payment is calculated as follows: $499/mo is the payment per $100K borrower, multiple this by 4 (hundred thousand). So roughly $2000/mo is your payment (4 times ~$500/mo).
First Time Buyers will find it easiest to qualify on a 5 Year fixed-rate contract, so use the best rate from the interest rate chart.
A 25 year amortization is the maximum available if your down payment is less than 20%. Longer amortization periods are popular with first time buyers as it means you can qualify for a larger loan for a given income level. Then, as your budget permits, increase your payments to decrease the amount of time it takes to pay of your mortgage and the amount of lifetime interest you will pay.
You have to renew your mortgage and interest rate at the end of every contract term.
Keep in mind that interest rates fluctuate all the time. Will you be able to afford your payments if interest rates have gone up by 2% at renewal? Do some "what-if" analysis.
For more comprehensive calculations, check out our mortgage calculators page.
Besides your monthly mortgage payment from above, you will need to account for the following items in your monthly budget:
Quantus Mortgage Solutions
5053 11 St SE
Calgary, AB T2H1M7
Canada
T: 403.238.3111
