1. What is a Mortgage Calculator Payment?

Definition: This calculator estimates the monthly payment for a fixed-rate mortgage based on the principal amount, interest rate, and loan term.

Purpose: It helps homebuyers and homeowners understand their potential mortgage payments when planning to purchase or refinance a property.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Monthly mortgage payment (CAD)
• \( P \) — Principal loan amount (CAD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the fixed monthly payment required to fully amortize the loan over its term.

3. Importance of Mortgage Payment Calculation

Details: Accurate payment estimation helps borrowers budget effectively, compare loan options, and determine affordability before committing to a mortgage.

4. Using the Calculator

Tips: Enter the principal amount in CAD, annual interest rate (without % sign), and loan term in years. All values must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: Does this include property taxes and insurance?
A: No, this calculates only the principal and interest portion. Your actual payment may include additional amounts for taxes and insurance.

Q2: What's a typical mortgage term in Canada?
A: Most Canadian mortgages have 25-30 year amortization periods with 5-year terms being common.

Q3: How does the interest rate affect payments?
A: Higher rates increase monthly payments significantly. A 1% rate difference can change payments by hundreds of dollars on large mortgages.

Q4: What if I want bi-weekly payments?
A: Divide the monthly payment by 2 for approximate bi-weekly amounts, or use a specialized bi-weekly calculator for more accuracy.

Q5: Does this work for variable rate mortgages?
A: This calculates fixed-rate payments only. Variable rates would require different calculations as rates change over time.