Mortgage Payment Calculator

Buying a future home requires a preliminary assessment to determine whether the project is within your reach. To help you make the right decisions during the purchasing process, the Xperto mortgage calculator is at your disposal.

This digital tool allows borrowers to calculate the amount of their mortgage payments. The calculation takes into account various information, such as the price of the property to be acquired, the amount of your down payment, the amortization period, the payment frequency, and the mortgage interest rate. It can also include other variables that may affect the payment of your mortgage.

Using the Xperto mortgage payment calculator is very simple. You just need to fill in the different fields of the online application. Information such as the purchase price, the down payment, and the amortization period are required.

In just a few clicks, you can estimate the exact amount to borrow for the purchase of your future home and the payments to be made throughout the term. You will then quickly receive offers of mortgage products that match your project. All that remains is to choose the financial product that best suits your needs.

What is a mortgage payment?

In the case of a mortgage loan, the borrower pays according to a predetermined schedule an amount to be paid to the lending institution as repayment, for the entire duration of the loan. This is the mortgage payment.
To determine the value of the payment, the lending institution adds the amounts of principal and loan interest. Mortgage insurance, mandatory when the down payment is less than 20% of the mortgage, is also taken into account in calculating the mortgage payment. As for mortgage payment, it can be made via monthly, bi-weekly or weekly payments depending on your preferences and financial capacity.
Key information to provide
One of the essential steps to estimate the amount of mortgage payments is to gather key information. You must provide several pieces of information, such as the purchase price of the real estate, the value of the down payment and mortgage insurance to determine the value of the mortgage. You will also be asked to indicate the interest rate you expect to pay or that has been offered to you. As for estimating the amortization period, it refers to the time required to repay your mortgage in full.
In principle, it is possible to manually apply mathematical formulas to calculate mortgage payments. However, using the Xperto mortgage payment calculation tool allows you to simplify the estimation and save considerable time.

What are the factors that influence obtaining the rate?

Certain factors can have an impact on the interest rate and therefore influence the amount of mortgage payments. You can benefit from a low rate and attractive repayment conditions by controlling certain elements.

Your credit score is among the criteria taken into account by banks to attest to your creditworthiness. The higher your score, the more you optimize your chances of obtaining a mortgage with an attractive interest rate. The lending institution studies your profile in advance by analyzing your payment history as well as your credit utilization. This procedure allows them to assess your risk level, essential data for the lender to adapt the interest rate they will offer you.

The bank also takes into account the geographical location of your future residence. Whether located in a rural or urban area, well-established or gentrified, the location of your project can be essential in determining the amount of mortgage payments.

Among the elements studied is the purchase price. If the amount of the housing to be acquired is high, the borrower must make a substantial down payment, minimum 5% of the purchase price. The amount of mortgage payments is also related to the value of the loan requested from the bank. The higher the loan, the higher the payment to be expected.

Also note that the amount of mortgage payments will be reduced if the borrower presents a high down payment, i.e., 20% or more of the property price. If the down payment is less than 20%, you must mandatorily take out loan insurance, which risks increasing the expenses related to mortgage repayment.

When applying for a mortgage loan, you must also take into account the repayment conditions. Often, lending institutions favor rapid mortgage repayments. By opting for a shorter amortization period, you optimize your chances of benefiting from a mortgage with an attractive interest rate. The bank will be more likely to offer you a low rate for a 15-year mortgage loan than for a 30-year loan. The amount of the initial payment also constitutes a determining factor in obtaining the rate. You considerably reduce the bank’s risks by making a substantial first payment, which gives you the right to attractive conditions and mortgage rates. It is recommended to make an initial payment equivalent to 20% of the loan to benefit from an advantageous rate.

The interest rate affects the amount of mortgage payments. If the rate is high, the amount of payments is also higher. Also pay attention to choosing the type of interest rate, whether it is fixed or variable:

• Fixed rate

For a fixed-rate mortgage loan, the interest rate remains the same throughout the entire amortization period. The borrower thus knows in advance the exact amount of their payments. This situation allows them to better manage their budget. This solution also ensures limiting risks related to financial market volatility. By locking in your rate, you are protected against a possible increase in market rates that could lead to an increase in the index and therefore in the amount of your mortgage payments. Note however that the fixed rate is generally higher than the variable rate at the time of the mortgage loan application.

• Variable rate

Unlike the fixed rate, the variable interest rate evolves according to market fluctuations, as well as the Bank of Canada’s policy rate and overnight rate target. This solution presents a significant advantage for borrowers who wish to benefit from a rate decrease during their term. The variable rate loan therefore has the advantage of being lower than the fixed rate at the beginning of the term. However, it is riskier, since rates are constantly exposed to possible change. In case of a high and sudden rate increase, the amount of monthly payments is certain to increase. It then becomes more difficult to manage your budget in case of rate fluctuations. Make sure then that you have sufficient financial capacity to face possible interest rate increases during the duration of your mortgage loan.

How to reduce your mortgage payments?

Different solutions allow you to reduce the value of your mortgage payments and achieve savings. Whether to deal with a financial difficulty preventing you from honoring your payments or to reduce the costs associated with your property, use the mortgage payment calculator and look at the mortgage amortization table. Among the possible alternatives if you are already repaying a mortgage loan, you can request an extension of the term duration. This solution consists of extending the amortization period in order to reduce the amount of periodic payments. In return, repaying your mortgage will take you more time.

Before signing your mortgage, planning for a higher down payment will also allow you to reduce the value of mortgage payments. Thanks to this alternative, you lighten the weight of the mortgage and its interest on your budget.

You can also shop for a lower mortgage rate in order to reduce the amount of interest. Compare the interest rates of different mortgage loan offers on the market and choose the product offering the best rate. You can seek help from Xperto mortgage broker to guide you in your search.

In the case where you already have a mortgage loan, refinancing is possible. This alternative is particularly interesting when current rates are lower than the one practiced at the time of signing. By benefiting from a lower rate, you reduce the amount of your periodic payments. However, make sure to check if the bank applies prepayment fees if you choose to refinance your loan.

Other alternatives such as renting out part of the acquired property are also possible. This solution allows you to reduce the charges of your mortgage while generating profits through rental income. When the price of the house you wish to acquire is too high, you can opt for a smaller and less expensive residence, thus reducing the amount requested for the loan. The acquisition of a new property can nevertheless lead to the appearance of certain fees. Among the costs to anticipate, fees related to moving, property transfer taxes as well as legal fees and other professional fees are always to be anticipated. This alternative however allows you to achieve long-term savings on ownership costs, particularly on mortgage payments and property taxes.

How to pay off your mortgage faster

To pay off your mortgage faster and achieve substantial savings, several methods are available to you. However, you must take into account your financial situation to determine if you have the means to accelerate the repayment of your loan. The possible solutions are:

• increase the amount of payments. If your budget allows it, you can supplement your periodic payments with a small additional amount. You can, among other things, round up the current payment to pay off your mortgage faster. However, make sure you can maintain the increase in the long term before making any changes. Also please check if the bank sets a limit on the amount of additional payments. If you exceed the imposed ceiling, you risk paying penalty fees;
• amortize the mortgage over a shorter period. By reducing the duration of the mortgage term, you cause an increase in the amount of payments. You also avoid accumulating interest over the duration of your mortgage, allowing you to achieve significant savings;
• pay a lump sum in addition to mortgage payments. Some mortgages offer the possibility of making additional payments every year within the limit of the amount imposed by the bank. The amount of lump sum payments is generally between 10 and 20% of the initial loan amount. Borrowers who have received a bonus, tax refund, inheritance or other occasional income can perform this operation;
• increase the frequency of mortgage payments. Switch from monthly payments to bi-weekly or weekly to pay off your loan faster.

Frequently Asked Questions (FAQ)

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