1. What is the TD Canada Trust Mortgage Calculator?

Definition: This calculator computes monthly mortgage payments according to TD Canada Trust's standard mortgage calculation method.

Purpose: It helps homebuyers estimate their monthly mortgage payments based on Canadian mortgage calculation standards.

2. How Does the Calculator Work?

The calculator uses the Canadian mortgage formula:

Where:

• \( M \) — Monthly payment (CAD)
• \( P \) — Loan principal (CAD)
• \( r \) — Effective monthly interest rate
• \( n \) — Total number of payments (term in years × 12)

The effective monthly rate is calculated as: \[ r = (1 + \frac{i}{2})^{\frac{1}{6}} - 1 \] where \( i \) is the annual interest rate (decimal).

3. Importance of Mortgage Calculation

Details: Accurate mortgage calculations help borrowers understand their financial commitments and plan their budgets accordingly.

4. Using the Calculator

Tips: Enter the loan amount, annual interest rate (e.g., 5.00 for 5%), and loan term in years. The calculator will compute your monthly payment.

5. Frequently Asked Questions (FAQ)

Q1: Why is Canadian mortgage calculation different?
A: Canadian mortgages use semi-annual compounding, resulting in a different effective monthly rate than simple division by 12.

Q2: What's included in the monthly payment?
A: This calculates principal and interest only. Taxes and insurance would be additional.

Q3: How accurate is this calculator?
A: It provides estimates based on standard formulas. Actual payments may vary based on specific terms and conditions.

Q4: Can I calculate different payment frequencies?
A: This calculator assumes monthly payments. Other frequencies require different calculations.

Q5: Does this account for variable rates?
A: No, this assumes a fixed rate for the entire term.