Mortgage Calculator

?
Enter the amount that you are planning on paying for the property
Property Value
STEP 1
Enter property purchase price
Haven't found a property to purchase yet?
Option #1
Option #2
Option #3
Option #4
?
Enter the amount that you will pay upfront
toward the property to obtain a mortgage
Down Payment
?
CMHC mortgage insurance is required on all
mortgages with down payment less than 20%
Mortgage Insurance
+
$19,000
$13,950
$11,900
$0.00
?
Total mortgage amount is calculated by subtracting
the down payment from the property price and adding
CMHC mortgage insurance (if applicable)
Mortgage Required
=
$494,000
$463,950
$436,900
$400,000
?
Amortization period is length of time that it would take
the mortgage holder to pay off the mortgage in full
Amortization Period
?
Please select the province where you are planning
on taking out the mortgage, as mortgage rates can
vary in different provinces
Select Province
STEP 2
Select province to get current
mortgage rates
?
Mortgage type specifies whether the interest
rate is variable or fixed
Mortgage Type
?
Mortgage term is the duration of time that you
are committed to a lender, rate and conditions
Mortgage Term
?
Mortgage rate is the interest rate that you will
be paying on the outstanding balance for the
duration of the mortgage term
Mortgage Rate
?
Please select how often you would like
to make your mortgage payments.
Payment Frequency
?
Mortgage payment is the amount that you will be
required to pay based on your mortgage terms
Mortgage Payment
?
This is an estimate of how much you should expect
to spend upfront in order to make this purchase
Cash Needed
Down Payment
$25,000
$50,000
$75,000
$100,000
Mortgage Insurance PST
+
$0
Lawyer Fee
+
$1,000
$1,000
$1,000
$1,000
Title Insurance
+
$500
$500
$500
$500
Land Transfer Tax
+
Total Cash Needed
=
$28,020*
$52,616*
$77,457*
$101,500*
* Plus Land Transfer Tax, please select province to calculate Land Transfer Tax

Contact Us

First Name
Last Name
Email
Phone
Message (Optional)
OR CALL
1.877.896.6727

Mortgage Calculator Examples

Once In A Lifetime Opportunity To Own This Huge 1 / 2 Acre Lot In Highland Creek With 2 Separate Dwellings. Very Secluded & Private With Lots Of Trees. Detached Garage / Workshop & Parking For 20 Vehicles. 52 Solar Panels Generating $11,000 / Year Income With Ontario Power Authority.**** Extras **** 4 Fridges, 2 Freezers, 3 Stoves, 3 Microwaves, 3 Dishwashers, 2 Washing Machines, 2 Dryers, 1 Tankless Water Heater & 1 Hot Water Heater, Above Ground Pool, Hot Tub, Tiered Deck And Gazebo, Detached 1.5 Car Garage / Workshop, 2 Sheds & Greenhouse. (Id:23934)
CALL1.877.896.6727
Property Price
$1,299,000
Minimum Down Payment (%)
20.00%
Minimum Down Payment ($)
$259,800
Mortgage Insurance ($)
$0
Mortgage Required ($)
$1,039,200
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$22,455
Mortgage Insurance PST
$0
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$283,755
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$279,755
Monthly Payment
$4,203
Large Corner Unit Rare 2 Bedroom Floor Plan. Unobstructed Panoramic Views, Offering 2 Balcony Walk-Out's. Well Cared For And Clean Unit. Hardwood Flooring And Large Eat In Kitchen. 2 Underground Parking Spots. Building Offering Numerous Amenities.**** Extras **** Granite Countertops, Dishwasher, Microwave, Fridge, Stove, Window Coverings And Lighting Fixtures Included. (Id:23934)
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Property Price
$665,000
Minimum Down Payment (%)
6.24%
Minimum Down Payment ($)
$41,500
Mortgage Insurance ($)
$24,940
Mortgage Required ($)
$648,440
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$9,775
Mortgage Insurance PST
$1,995
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$54,770
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$50,770
Monthly Payment
$2,622
One Of The Best Ravine Lots In South Richvale On A Private Dead End Str.! Gorgeous Custom Built Home Approx. 4500 Square.Ft. Recently Extensively Renovated Inside And Out! Shows Like A Brand New Home! Wrought Iron Automatic Gates. 10 Ft Ceil Main Floor, 18 Ft Grand Entrance And Family Room. Lots Of Interesting Architectural Features: Intricate Floating Staircase, Multiple Balconioes, Gorgeous Stone Fireplace Etc! Finished Walk-Out Basement, Lovely Covered Terrace At Back!**** Extras **** All Appliances, Washer And Dryer, All Electrical Lighting Fixtures, Video Surveillance System, Garburator, Reverse Osmosis System, Sprinklers, New Tankless Hot Water Tank, New Alarm System Panels, Central Vac. Walk-Out Basement With 5Th Bedroom And 3 Piece Bath, Large Windows (Id:23934)
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Property Price
$3,699,000
Minimum Down Payment (%)
20.00%
Minimum Down Payment ($)
$739,800
Mortgage Insurance ($)
$0
Mortgage Required ($)
$2,959,200
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$78,950
Mortgage Insurance PST
$0
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$820,250
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$816,250
Monthly Payment
$11,967
Beautiful Executive Townhouse-2 Levels In Fantastic Applewood Location. Main Floor Features Gorgeous Marble Floors And High 9Ft Ceilings. Upper Level Has Quality Hardwood Floors And Soaring 10Ft Ceilings. Crown Moldings, Wainscoting Vaulted Ceiling In Master Bedroom & Large Window. Beautiful Kitchen With Stainless Steel Appliances, Granite Counters, Custom Marble Back-Splash, Breakfast Bar. Balcony With Natural Gas Line For Barbeque. Underground Garage +1 Parking Outside.**** Extras **** Stainless Steel Fridge, Stove, Dishwasher, Microwave With Built In Vent Hood. Samsung Washer + Dryer. White Wardrobe At Top Of Entrance Stairs. All Existing Light Fixtures And Window Coverings. (Id:23934)
CALL1.877.896.6727
Property Price
$615,000
Minimum Down Payment (%)
5.93%
Minimum Down Payment ($)
$36,500
Mortgage Insurance ($)
$23,140
Mortgage Required ($)
$601,640
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$8,775
Mortgage Insurance PST
$1,851
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$48,626
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$44,626
Monthly Payment
$2,433
Welcome To ""The Britt"" Luxurious Condo In Prime Downtown Location! Brand New Exquisitely Designed 493 Square. Ft. Unit Featuring An Open Concept Layout, Floor To Ceiling Windows & Hardwood Flooring Throughout! Modern Kitchen With Built-In Appliances & Large Bedroom Featuring A Walk-In Closet! Enjoy The World Class Amenities Including Outdoor Terrace & Pool, Marble Spa, Fitness Room, Party Room, Theatre, 24-Hr Concierge / Security, Overnight Guest Parking And Pet Spa.**** Extras **** Brand New Appliances! Integrated Refrigerator And Dishwasher, Cooktop, Slide-Out Exhaust, Built-In Stainless Steel Wall Oven & Microwave And Front Load Washer / Dryer. Steps To Uoft & Ryerson Univ, Subway Station, Supermarkets, Restaurants, Bloor & Yorkville (Id:23934)
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Property Price
$649,900
Minimum Down Payment (%)
6.15%
Minimum Down Payment ($)
$39,990
Mortgage Insurance ($)
$24,396
Mortgage Required ($)
$634,306
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$9,473
Mortgage Insurance PST
$1,952
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$52,915
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$48,915
Monthly Payment
$2,565
Location, Location, Location! This Bright And Rarely Offered Spacious 1B 1W Corner Unit Comes Equipped With A Locker And Parking. Exceptional Layout Throughout With A Large Bedroom, Large Windows, And Double Closet. Steps To U Of T. Hospitals, Financial District, Ttc Subway, Shops, Restaurants And More. Don't Miss Your Opportunity To Move In To This Well Established Building!**** Extras **** Stainless Steel Stove, Stainless Steel Fridge, Dishwasher, Microwave, Washer, Dryer, All Elf's, All Window Coverings. Amenities Included 24 Hr Concierge, Gym, Large Pool, Sauna, Visitors Parking, Guest Suites, Board Room, Card Room, Party Room, Recreation Room & Bicycle Room. (Id:23934)
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Property Price
$624,900
Minimum Down Payment (%)
6.00%
Minimum Down Payment ($)
$37,490
Mortgage Insurance ($)
$23,496
Mortgage Required ($)
$610,906
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$8,973
Mortgage Insurance PST
$1,880
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$49,843
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$45,843
Monthly Payment
$2,471
Welcome Home! To This Gorgeous, Bright, And Newly Renovated Condo, Comes With New Microwave, New Laminate Floors Throughout, New Kitchen Counters, New Backsplash, All Done Less Than A Month Ago. Den Can Be Used As A Second Bedroom, Custom Closet In Bedroom.**** Extras **** Stainless Steel Fridge, Stainless Steel Stove, Stainless Steel Microwave, Stainless Steel Dishwasher, Stacked Washer And Dyer, All Light Fixtures, All Window Coverings , Custom Closet In Bedroom, Pax Wardrobe And Shelves In Den. Ttc, 401, Scarborough Town Centre Ymca All Within Mins. (Id:23934)
CALL1.877.896.6727
Property Price
$448,888
Minimum Down Payment (%)
5.00%
Minimum Down Payment ($)
$22,444
Mortgage Insurance ($)
$17,058
Mortgage Required ($)
$443,501
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$5,453
Mortgage Insurance PST
$1,365
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$30,762
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$26,762
Monthly Payment
$1,794
Amazing Location Featuring 2 Bedrooms With Two Full Bathrooms. This Penthouse Assignment Sale Won't Last Long, Five Star Building With Lots Of Amenities, Close To Plaza, Square One Mall, 401, 403, School Too Many To List. One Parking Spot & One Locker Unit Included In The Price. Tentative Closing March 2021.**** Extras **** Nine Foot Ceiling, Laminate Flooring, Quartz Countertop, Stainless Steel Under-Mounted Kitchen Sink, Stainless Steel Glass Cooktop And Self Cleaning Oven, Stainless Steel Built-In Dishwasher, Stainless Steel Fridge. (Id:23934)
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Property Price
$579,900
Minimum Down Payment (%)
5.69%
Minimum Down Payment ($)
$32,990
Mortgage Insurance ($)
$21,876
Mortgage Required ($)
$568,786
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$8,073
Mortgage Insurance PST
$1,750
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$44,313
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$40,313
Monthly Payment
$2,300
This Huge Custom Built Home Is Something You Have To See For Yourself To Believe. 6 Bedrooms 4 Bathrooms. A Double Lot!! 8 Car Parking. This Property Has It All. Hardwood Floors Throughout, Granite Counter Tops In Main Floor Kitchen. Over 100K Spent On Renovations. Never Been Listed!! This House Is Perfect For A Large Family Or A Builder / Investor, This House Has It All.**** Extras **** Appliances Included: 2 Fridge, 2 Stove, 1 Built-In Dishwasher, 2 Washers & 2 Dryers, Built-In Microwave. Roof Is Two Years Old, Air Conditioner Is Two Years Old. Steel Fire Rated Doors Throughout. This House Is Perfect For A Large Family Or For A Builder. (Id:23934)
CALL1.877.896.6727
Property Price
$1,330,000
Minimum Down Payment (%)
20.00%
Minimum Down Payment ($)
$266,000
Mortgage Insurance ($)
$0
Mortgage Required ($)
$1,064,000
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$23,075
Mortgage Insurance PST
$0
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$290,575
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$286,575
Monthly Payment
$4,303
Beautifully Renovated 3 Bedroom End Unit Townhouse In High Demand Area. Stunning Kitchen With Large Island, Gas Stove & Stone Countertop. Open Concept Main Floor. Spacious Living Room With Walkout To Private Backyard. Pot Lights & New Modern Washrooms. Basement With 2 Bedrooms,Bathroom & Kitchen. Close To York University, Hospital, Schools, Highways; 400, 401, Shopping Malls & Plazas. 5 Min Walk To Ttc. Future Light Rail At Sheppard. Just Move In & Enjoy!**** Extras **** 2 Fridge, 2 Stove, Dishwasher, Washer & Dryer, All Electrical Light Fixtures, All Window Coverings. 1 Portable Air Conditioner. Newer Furnace, Newer Windows. (Id:23934)
CALL1.877.896.6727
Property Price
$579,000
Minimum Down Payment (%)
5.68%
Minimum Down Payment ($)
$32,900
Mortgage Insurance ($)
$21,844
Mortgage Required ($)
$567,944
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$8,055
Mortgage Insurance PST
$1,748
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$44,203
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$40,203
Monthly Payment
$2,297
Luxury Living In This Newer Modern Open Concept Condo In Highly Coveted Pinnacle Residence 9. This Bright Spacious Two Bedroom Plus Study / Den Features Open Concept Kitchen With Upgraded Maple Cabinets, Backsplash, Granite Counter Top, Stainless Steel Appliances, Floor To Ceiling Windows With Toronto Skyline And Lake Views. Master Bedroom With 4Pc Ensuite, Walk In Closet. Ultimate Location Close To Shopping , Restaurants, Schools, Public Transit And City Centre**** Extras **** Stainless Steel Fridge, Stove, Built-In Dishwasher, Built-In Microwave, Washer And Dryer. All Electrical Light Fixtures, All Windows Coverings And Curtains. (1) One Parking, (1) One Locker. State Of The Art Building With Fabulous Amenities ! (Id:23934)
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Property Price
$643,888
Minimum Down Payment (%)
6.12%
Minimum Down Payment ($)
$39,389
Mortgage Insurance ($)
$24,180
Mortgage Required ($)
$628,679
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$9,353
Mortgage Insurance PST
$1,934
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$52,176
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$48,176
Monthly Payment
$2,542
Gorgeous Custom Built Home Situated In Coveted Cliffside Neighbourhood! Over 5,000 Square.Ft. Of Luxury Living Featuring Dbl Car Garage, Coffered Ceilings, Wainscoting, Large Windows & An Abundance Of Natural Light! Beautiful Hwd Flooring And Led Lighting Throughout! 4 Large Bedrooms, Each With Walk-In Closets And Gorgeous Tray Ceilings! Master Ensuite Features Jacuzzi Tub & Glass Shower! Fully Finished Open Concept Basement With Full Washroom & Separate Entrance!**** Extras **** Stainless Steel Fridge, Built-In Wall Oven & Microwave, Gas Cooktop & Hood Fan, Stainless Steel Dishwasher, Stainless Steel Washer & Dryer, Garage Door Openers. Separate Side Entrance To Large Mud Room With Organizers. Interlock Drive & Privacy Fenced Yard! (Id:23934)
CALL1.877.896.6727
Property Price
$1,599,000
Minimum Down Payment (%)
20.00%
Minimum Down Payment ($)
$319,800
Mortgage Insurance ($)
$0
Mortgage Required ($)
$1,279,200
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$28,455
Mortgage Insurance PST
$0
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$349,755
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$345,755
Monthly Payment
$5,173
Luxurious Tridel Parkside On Grandview, Gated Community In Heart Of North York Area In The Prestigious Willowdale Area, Well-Kept Immaculate Condition, Open Concept, Practical Layout Living & Dining Area With A Dedicated Family Room, Kitchen Features Breakfast Area With Center Island. Walking Distance To Ttc Subway, 24Hrs Metro, Steps To Mckee & Earl Haig Schools,Library,Civic Center, Parks And More.**** Extras **** Stainless Steel Stove,Fridge, Dishwasher, Washer, Dryer,All Window Coverings. Amenities: 24Hr Security Guard,Gym,Indoor Pool,Whirlpool,Sauna,Visitor Parking,Party Room,Guest Suites, Billiards Room, Etc. (Id:23934)
CALL1.877.896.6727
Property Price
$869,000
Minimum Down Payment (%)
7.12%
Minimum Down Payment ($)
$61,900
Mortgage Insurance ($)
$32,284
Mortgage Required ($)
$839,384
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$13,855
Mortgage Insurance PST
$2,583
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$79,838
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$75,838
Monthly Payment
$3,394
Not Your Average Town Home-Truly A Quality Built Home! This Unit Comes Packed With Upgraded Ftrs Including 9' Ceilings, Upgraded Modern Trim Package Complete With Black Lever Handles, Hardwood Staircase, Quartz Countertops Throughout, Stainless Steel Appliance Package,Smart Home Technology, Interlocking Driveway, Finished Basement With Rough-In Bthrm And So Much More.Maint. Fee $85 / Month Which Covers Building Insurance, Snow Plowing For Shared Roads & Garbage Disposal**** Extras **** Stainless Steel Fridge, Stove, Dishwasher And Above The Range Microwave, Smart Front Entry Lock, Nest Thermostat, Smart Garage Door Opener And Google Nest Hub. Status Cert. Is Available (Id:23934)
CALL1.877.896.6727
Property Price
$579,999
Minimum Down Payment (%)
5.69%
Minimum Down Payment ($)
$33,000
Mortgage Insurance ($)
$21,880
Mortgage Required ($)
$568,879
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$8,075
Mortgage Insurance PST
$1,750
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$44,325
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$40,325
Monthly Payment
$2,301
Beautiful One Bedroom Suite In The Highly Sought After Boardwalk Condos In The Beach. This Freshly Painted Very Well Taken Care Of Unit Offers An Updated Bathroom, New Fridge And Stove, New Broadloom In The Bedroom, Granite Counter Tops And Updated Light Fixtures. Very Large Open Concept Combined Living And Dining, Walk Out To Your Large Patio From The Living Room Or Your Master Bedroom. Fully Loaded With Parking, Locker And Gas Barbeque Hook Up. Rarely Offered.**** Extras **** New Stainless Steel Fridge, Stove. Dishwasher, Washer / Dryer, All Light Fixtures, All Window Coverings, 1 Parking And 1 Locker. (Some Pics Virtually Staged) Property Is Move In Ready. (Id:23934)
CALL1.877.896.6727
Property Price
$634,900
Minimum Down Payment (%)
6.06%
Minimum Down Payment ($)
$38,490
Mortgage Insurance ($)
$23,856
Mortgage Required ($)
$620,266
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$9,173
Mortgage Insurance PST
$1,909
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$51,072
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$47,072
Monthly Payment
$2,508
Location! Location!Absolutely Beautiful. Fully Upgraded Built Brand New House In One Of The Most Desirable Locations In Brampton. Close To All Amenities Park, Shopping And School. The Whole House Is Done Brand New. Roof 2020, New Insulation 2020, Furnace 2020, Water Heater 2020, Ac 2020.**** Extras **** All Stainless Steel Brand New Appliances And Electrical Lighting Fixtures. A New Stainless Steel Fridge Will Be Placed By 23Rd Oct 2020 (Id:23934)
CALL1.877.896.6727
Property Price
$599,900
Minimum Down Payment (%)
5.83%
Minimum Down Payment ($)
$34,990
Mortgage Insurance ($)
$22,596
Mortgage Required ($)
$587,506
Best Mortgage Rate (%)
1.60%
Mortgage Type
5 Years Fixed
Amortization
25 Years
Land Transfer Tax (LTT)
$8,473
Mortgage Insurance PST
$1,808
Lawyer Fee
$1,000
Title Insurance
$500
Total Cash Needed
$46,771
First Time Home Buyer
Land Transfer Tax Credit
-$4,000
Cash Needed
$42,771
Monthly Payment
$2,376

Mortgages In Canada

What Is A Mortgage Calculator?
Simply put, a mortgage calculator is like a manual calculator with the exception that it is automated and found on many bank, credit union, and third party websites on the Internet. A mortgage calculator can be used by anyone for free and multiple times, of which this calculator determines the outcome when specific mortgage related information is entered. As you will quickly discover, there is a basic mortgage calculator that requires minimal information, such as the dollar amount of the total mortgage (including any down payment made & mortgage default insurance if warranted), the number of months or years the mortgage will be carried, and the interest/mortgage rate.
The calculation will provide a basic payment amount, and you will see how making a down payment (not to mention the interest rate) affects the outcome of the calculation. By using the mortgage calculator more than once and 'playing with the numbers', you will get a better sense of how certain scenarios can raise or lower your payments (shortening and lengthening the number of years before the mortgage will be paid off in full with interest can really be an eye opener).
What Exactly Is A Mortgage Rate?
A mortgage rate or an interest rate is basically the percentage charged up and over the amount of money you need to borrow, so in other words, it is what the lender charges you for loaning you the money. Mortgage rates can differ between lenders and yes, it is financially ideal to get the lowest mortgage rate possible, but there are certain aspects that need to be in place to get that lower rate.
There are two basic types of borrowers: the people that are financially stable & prepared to take on a mortgage (typically these people are offered a lower rate to gain their business), and the people that are less prepared financially to take on a mortgage (typically these people are offered a higher rate to offset any risks to the lender). There are various types of lenders (such as major banking institutions) who can offer lower mortgage rates and private lenders who deal in high risk mortgages and offer higher mortgage rates.
Why Are There So Many Different Types of Mortgages?
Each mortgage type/product performs differently, and they are all designed to work hard for both the lender and the borrower’s personal financial situation. Just as borrowers themselves vary, so do the kinds of mortgages that are offered by lenders. There are mortgages that are designed to work well for people that have already held & paid off a mortgage or are currently paying on a mortgage, and then there are mortgage types that are designed for first time mortgagees.
The top three most popular mortgages are a fixed rate mortgage (the interest rate is ‘fixed’ for an agreed-upon set term of time), a variable rate mortgage (the interest rate is dictated by the prime rate, with any changes reflecting on the principal, not the fixed payments), and an adjustable rate mortgage (the interest rate is dictated by the prime rate; any changes reflect on the payments which are ‘adjusted’).
There is also a hybrid mortgage (or a 50/50 mortgage), which combines a fixed rate & variable rate mortgage together. Learning about all the mortgage types available (through a mortgage professional) provides borrowers with an upper hand to make sound decisions.
Mortgage Terminology
You are not the only one who may find certain terms regarding mortgages a bit head-spinning, so let’s clear up some of the basic wording that you will see when diving into the mortgage market.
Amortization Period
The total number of months or years it will take for you to completely pay off your mortgage.
Amortization Schedule
The breakdown of the payments for your mortgage (how much you pay, how much of that goes towards the principal amount, how much goes towards the interest, and the balance remaining).
Mortgage Term
The length of time that the interest rate is set or fixed; the end of this term is when the mortgagee can renegotiate a new mortgage or pay the balance of the mortgage in full.
Mortgage Renewal
When the term of your mortgage comes to an end, you will have the option to discuss the possibility of a new mortgage, its terms, and its interest rate.
Mortgage Refinancing
The act of switching to a new lender to arrange a new mortgage or to renegotiate an existing mortgage.
Mortgage Prepayment
There are mortgage 'deals' that are sweetened by the ability to either double up on payments, increase the percentage paid on monthly payments, or pay off a certain percentage of the principal annually (without any penalty).
Closed Mortgage
When a mortgage is closed, this means that the mortgage rate and the mortgage contract are locked in and non-negotiable for a set period of time.
Open Mortgage
With no worries of any penalties and being completely flexible with no set term, you can pay off your mortgage at any time with this type of mortgage.
Mortgage Insurance
This is a specific type of insurance which protects the lender in the event you should default on your mortgage for any reason (typically mortgage insurance is required if a borrower is deemed a higher risk and is only offered a high ratio mortgage).
Down Payment
Generally, a borrower must have saved a down payment to invest in the home/property upfront (the down payment cannot be borrowed), of which the payment itself is the monetary difference between the value of the mortgage loan and the purchase price of the home/property.
Home Equity Line of Credit (HELOC)
Tied directly to a mortgage, borrowers can sometimes gain access to a certain percentage of funds to borrow against the assessed value of the home/property. There is an interest rate imposed onto this type of loan, not to mention that it is set to keep pace with the prime rate, but there is flexibility as to payments and payoff.
Mortgage Maturity
This is the date that your mortgage term ends, presenting you with the option to pay off the mortgage in full, or renew your mortgage for another term.
Mortgage Affordability
The concept of a lender considering your ability (or affordability) to be able to pay a mortgage monthly via the total household income, the mortgage payments, and monthly expenses/overhead.
Mortgage Principal
This is the amount left outstanding on the mortgage itself.