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My husband and I are looking for a home. How can we calculate what our new mortgage payment might be?

Most bank web sites include a calculator function, which will help you to determine the amount of your new payment. You’ll need to fill in the amount of the mortgage, the amortization period, the term, and the payment frequency. If you are using a bank site, the current interest rate is usually pre-filled for you. CMHC (Canada Mortgage and Housing Corporation) also provides excellent information for consumers.

The amount of the mortgage is the amount you need to borrow to purchase your home. There will be other costs involved in the purchase, though, so allow for these in your calculations. For example, if you purchase a home for $200,000 and you have $50,000 as a down payment, your mortgage would of course be $150,000. Examples of other costs include:

  • Land transfer tax, a percentage based on the purchase price
  • Legal fees
  • Application/appraisal fee
  • Your moving costs
  • Adjustments to oil, gas, etc.
  • Cost of a new survey, if needed

For more information on mortgages and mortgage calculations, here are some excellent resources:

Books

The Money Adviser, The Canadian Guide to Successful Financial Planning, 2nd Revised Edition, by Bruce Cohen with Alyssa Diamond. Published by Stoddart, Canada

The Money Companion: Manage Your Money and Achieve Financial Freedom, by Elaine Wyatt. Published by ITP Nelson, Canada

Websites

www.chmc.ca, Canada Mortgage and Housing’s excellent web site includes tips, articles and calculators, and will provide free software that includes home ownership calculators

Check bank web sites, too, for mortgage payment calculators.