Mortgage Refinance

Mortgage Payment Calculator

When it comes to mortgages, there are a lot of factors that go into determining the final sum that you pay each month. It can be advantageous to have a clear idea of how much your mortgage will cost before applying for one. A mortgage payment calculator is an ideal way to calculate the cost of your mortgage before committing to one.

With a mortgage calculator, you can determine your monthly payment for your loan and compare prices with different scenarios depending on down payments, fixed or variable rates, and more.

Why Should You Use a Mortgage Calculator?

The primary purpose of any mortgage calculator is to give people who are interested in taking out a mortgage an idea of the cost. It is not advisable to commit to paying a mortgage without fully understanding what it would cost you. Mortgage calculators are innovative tools that allow you to put down all the variables that make up your final mortgage price and adjust them accordingly, so you can find the best mortgage plan for you.

With a mortgage calculator, you can figure out ways to reduce your mortgage payment by changing some factors. A mortgage calculator is an excellent tool for homeowners that want to know how a mortgage will fit into their budget. Using this tool, you will have a clear idea of just how much you will have to pay each month for your mortgage.

Factors that Affect Mortgage Prices

A few factors affect the final amount that a homeowner pays each month for their mortgage. Adjusting these factors can cause significant changes to the amount of money paid monthly. The home loan calculator takes all of these into account when helping you calculate your mortgage price.

Home amount

This is the asking price of the home you desire to purchase and the amount you require from a bank or lender. Mortgage lenders usually have criteria that determine just how much a person can borrow for their mortgage. This is determined by the homeowner’s total income and expenses.

Down payment

The down payment is an upfront payment made on the home purchase. It is usually a percentage of the total home amount. The amount of down payment a customer can pay determines how much their monthly payment will be. A down payment can range in size, depending on the financial ability of the homeowner, and the mortgage plans provided by the mortgage lender. The higher the down payment, the lower the monthly payments and vice versa.

Loan price

The loan price is the total amount of money a homeowner receives from the mortgage lender. This is calculated as the home amount minus the down payment that has been made and any costs covered by insurance that have been taken away. It is from this price that an interest rate is calculated.

Amortization period

The amortization is the total time it will take to pay off your loan fully. A longer amortization period ultimately results in smaller monthly payments, while a shorter amortization period will lead to higher monthly payments. Longer amortization periods also end up with higher overall interest paid as the payment period is longer. The mortgage payment calculator will help determine the best amortization period for you.

Interest rate


The interest rate is a percentage of the loan price that the homeowner pays each month. The interest rate is the cost of borrowing and represents the profit of the mortgage lender. Most lenders offer either fixed interest rates or variable interest rates to their customers. Fixed interest rates are unchangeable rates that remain the same throughout the payment period. Variable interest rates are adjustable rates that only stay fixed for certain periods. Variable rates are adjusted due to factors such as market conditions.

Variable interest rates are generally believed to result in lower monthly payments than fixed rates. With a mortgage calculator, you can determine what types of rates, down payment amounts, and amortization periods suit you best.

How to Use a Mortgage Payment Calculator

Different mortgage calculators may have different interfaces for how they work. However, no matter what calculator you use, there will be constants.

Firstly, you will have to put in your home price. This works whether you are buying a home for the first time or you already own a home and you’re looking to refinance your mortgage.

The next step is to put in the amount you are willing to pay as a down payment. For mortgage refinances, the down payment field may ask for the amount of equity you own instead. Down payment can be entered as a percentage of the home amount or as a dollar amount.

Once you’ve put in your down payment amount, the calculator may ask for your preferred amortization period next. You can put this in yourself, or the calculator may suggest an amount of time for you. A typical mortgage amortization period may last about 30 years, but you are free to put a different amount, like 20 or 15, into the home loan calculator.

Finally, the calculator will ask for your interest rate. Here, you can put in the interest rate that you feel you will be comfortable paying or the rate you know your lender will request.

With all of this information put in, the calculator will give you new values for interest rate and loan price. These are the best rates that are available to you based on the information you put in. you are free to adjust your down payment amount of amortization period if you want to see alternate results from the calculator.


Mortgage calculators are easy to use and incredibly beneficial for anyone interested in buying a home. With a mortgage payment calculator, you can enter into your mortgage plan with a clear idea of how much your mortgage will cost. Mortgage calculators are free and offer reliable results. Instead of jumping into a mortgage blind, make use of a home loan calculator to get a good idea of the cost.

Get estimate of your monthly mortgage payment with the help of mortgage payment calculator available at Best Mortgage Online website.

New Purchase Mortgage

How Financial Institutions Calculate your Mortgage Payment

If there is one thing we have all learnt since we were kids, it must be that prices can be deceiving. As children, when we buy something we like, the cost on the shelf could be different from the cost on the counter because of the sale tax. However, we didn’t know that those tiny unexpected increments prepared us for the concept of interest and principal amount.

Every economy’s financial institutions thrive on the concept of interest. Since a mortgage is one of the services, financial institutions offer, the idea of interest is an integral part of it, and it, along with the principal amount, makes up the mortgage payment. So, what is this mortgage payment?

Mortgage payment runs on the concept of interest and principal. It is the actual money off your mortgage and the interest you pay your mortgage lender for borrowing you the money you need to buy a house. There’s more; find out all about it as you continue to read.

What is Mortgage Payment

Your mortgage payment is a combination of the principal mortgage payment and the interest. There is not much to say about the principal amount, as it is the actual value of the mortgage itself, with interest being the cost you pay to your financial institution for giving their money to help you get the house you want.

Your principal amount is essential, and it determines the interest you will pay during the cycle of your mortgage payment. You see, your mortgage lender charges you interest on the principal amount that you owe. So, the more you continue to pay down the amount you owe, the more interest you will gradually reduce.

This means that the earliest period of your mortgage is usually the most expensive, as you haven’t made a considerable payment on the principal amount itself. Although if you can make those early days relatively inexpensive if you have enough cash to pay as your initial deposit or down payment. Your interest would be lower when you do this, as you have made headway with the principal amount.

Your mortgage payment comprises monthly payments that you will pay until the mortgage term runs out. The payment depends on the interest rate that the bank offered you, and you accepted it at the beginning of the mortgage. Although you may want to finish paying before the agreed term, it would cost you as mortgage lenders require you to pay a pre-payment penalty or charge if that happens.

Now, since the principal amount is precise as it is the amount you truly need, how about the interest you have to pay, and why do mortgage lenders charge interest anyway? The truth is, interest is how mortgage lenders make their money for providing you with the cash you need.

As you can see, you need to have an idea about how your mortgage lender determines the interest rate you pay. Don’t worry. We promise not to bore you with the mathematical calculations, but you will know what you need to know about interests before you apply and sign for a mortgage term.

How your Financial Institution Calculate your Interest

You might wonder why there is a semblance in interest rate after getting offers from multiple lenders. It does look unfair. It is like the whole Canadian mortgage system wants to fleece you of your hard-earned money.

We can tell you that they aren’t trying to fleece you of your money. In fact, you and your lender have something in common. You both are borrowing money. Shocked? Don’t be. We will make it more straightforward now. Picture this. Your mortgage lender is borrowing money from the government, and as your mortgage lender is charging you an interest rate, the government through the bank of Canada is charging your lender.

Mind blown? Yeah. The interest rate the government charges the bank is the Prime rate, and it is one of the factors that determine the interest rate your mortgage lender charges you. The other factors are;

  • Your Credit Rating
  • Principal Amount.
  • Whether the rates are fixed, variable or hybrid
  • Amortization length
  • Payment Schedule

Credit Rating

Your credit rating comprises your credit report and credit score. Lenders examine these two before they decide to lend you the money you need for your mortgage. These two also determine your interest rate, should mortgage lenders decide to give you the money you need. The poorer your credit rating, the fewer chances you will get a mortgage and the higher your chance of getting an expensive mortgage.

Principal Amount

We have explained this bit about the principal amount earlier on under a previous heading. In summary, the higher your principal amount, the higher your interest. To prevent this, deposit a handsome fee as your down payment.

Whether the Rates are Fixed, Variable or Hybrid

Majorly, your lender would offer you two types of mortgages. Your financial institution could provide you with a fixed-rate or variable mortgage. Fixed-rate mortgage benefits you when your interest is low, as your financial institution will maintain that rate till the end of the mortgage. However, fixed-rate mortgages rarely have low-interest rates. The reason for this is simple.

Your mortgage lender bears risk by fixing the rate for you. Your lender is saying that they will maintain that rate no matter the economic situation.

On the other hand, a variable rate is a rate in flux. Your mortgage lender or financial institution starts with one rate, and during the term of your mortgage, that rate will change. The rate will change due to economic conditions or any other conditions. So, as a borrower, you would be taking on more risks. Fortunately, variable rates have low rates.

There is one more. The hybrid rate combines the qualities of fixed and variable rates. An aspect of your mortgage will have a fixed interest rate. The other part would have a variable interest rate. So, you have the benefits which those two rates offer. For instance, you will be partially protected against an increment in rates. Likewise, you will enjoy some advantages when rates fall.

Payment Schedule

Your payment schedule covers how much time you want to make your mortgage payment. You can choose to have an accelerated payment, which gives you the power to make an extra payment annually. This additional payment comes in the form of a 13th-month payment. You can escape paying more interest this way.

Your Amortization

Your amortization is the time-frame it takes you to complete your mortgage payment. As your amortization increases, your payment reduces. On the other hand, you will pay more interest the longer it is.


As you can see, financial institutions use specific metrics to calculate your interest. You often determine how favorable these calculations will be  when you pass these metrics.

Choose Best Mortgage Online as your Mortgage Consultant. Our experts help you find the best mortgage rates in Canada to assist you in your home purchasing process. Contact us via the button below.