Mortgage Calculator Canada – Free Tool!

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This Mortgage Calculator Canada can be used to figure out monthly payments of a home mortgage loan, based on the home’s sale price, the term of the loan desired, buyer’s down payment percentage, and the loan’s interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.

Purchase & Financing Information
	Sale Price of Home:	(In Dollars)
	Percentage Down:	%
	Length of Mortgage:	years
	Annual Interest Rate:	%
	Explain Calculations:	Show me the calculations and amortization

Canadian mortgages in a nutshell: Learn the basics with this simple guide to what’s on tap

For novice and veteran homebuyers alike, the number of varying types of mortgages and their available options seems never ending and always changing and smart shoppers should always review the available options to see how they will affect them. The guide below to some of the basic mortgage options available can help consumers figure out the best affordable option based on their current financial profile.

Capped, Convertible, Fixed and Variable Rate Mortgages

• Fixed Rate Mortgage – The interest rate on this type of mortgage is set for the term of the mortgage and gives Canadian consumers the security of knowing that their interest rates will not change but doesn’t offer any interest rate flexibility if interest rates fall. However, homebuyers will know exactly how much their payment will be and they will also know exactly how much they still owe at the end of their term.
• Variable Rate Mortgage – The interest rate here fluctuates and provides flexibility when rates are low but can put a crimp on the bank account when they rise sharply. The part of the mortgage payment here that pays off the remaining balance changes as interest rates rise or fall. When the interest rate falls, more of the mortgage payment goes to the principal, helping pay off the mortgage faster. However, when interest rates rise, more of the mortgage payment is applied to the accruing interest which in turn means the home mortgage will take longer to pay off. Also, this type of mortgage can sometimes be converted to a fixed rate.
• Convertible Rate Mortgages – These mortgages can be either fixed rate or variable rate loans and give consumers the flexibility of locking in longer lower terms when rates fluctuate dramatically during their current term without a penalty. Short term fixed rate mortgages can be converted to longer fixed or variable rate mortgages, depending on the lender’s terms.
• Capped Rate Mortgages – Variable rate mortgages that a bank or lender has guaranteed not to exceed a certain percentage set by them which protects consumers when rates go up dramatically.

Typically, lenders offer fixed and variable rate mortgages with varying mortgage terms, which is the length of a mortgage agreement. Usually, these terms vary from 6 months to 10 years and when a term expires, the mortgage balance can be paid off or the lender will offer either a short or long term renewal. This period also offers consumers to find a better rate, if possible.

Short terms typically run two years or less, sometimes have a higher interest rate and is a good choice if it is believed that interest rates will fall by the time the term comes up for renewal.

A long term is usually three years or more and is a solid choice when rates are low. Long terms also give homebuyers the security of knowing what to expect as far as payments.

Conventional Mortgages and High Ratio Mortgages

• Conventional Mortgage – Home loans for less than 80% of the home’s value are considered conventional mortgages and are not required by Canadian law to have mortgage insurance, which does nothing for homebuyers but protects the mortgage lender from a borrower defaulting on their home loan.
• High Ratio Mortgage – Mortgages for more than 80% of the home or property’s value are known as high ratio mortgages and are required by the Canadian National Housing Act (NHA) to carry mortgage insurance.

Canadian home buyers can skip paying the extra expense of mortgage insurance with a down payment of at least 20% or more of the home or property’s value. The price of this insurance depends on the loan’s value and the amount of the home’s down payment with premiums typically ranging from 1 percent to 3.4 percent of the home loan’s value. Also, home mortgage insurance premiums can be included in the mortgage’s principal portion or can be paid up front.

Open Mortgages and Closed Mortgages

• Open Mortgages – This type of mortgage offers consumers the flexibility of paying a small part or the entire mortgage at any time penalty-free.
• Closed Mortgages – This mortgage requires a set number of payments to be made at set times, such as weekly or monthly.

Open mortgages are typically short terms of six months to a year and sometimes carry a higher interest rate than closed mortgages but are good for consumers thinking of selling or flipping a home or property or are expecting a cash infusion from another source such as an insurance settlement or the sale of a different property.

On the other hand, a closed mortgage offers consumers the financial security of fixed payments and lower interest rates than open mortgages, as well as more term options than open ones.

While banks or lenders may have more variations and combinations, these are some of the basic mortgages available to consumers and with an assist from the easy-to-use Canadian mortgage calculator, Canadians can see exactly how much mortgage payments will be and calculate what they can easily afford.