Do keep into consideration that when you are using the calculators there can be some variance on the answers it provides as the information you have may be out slightly. Any adjustments to the figures you put into a mortgage calculator will have an affect on the information it will provide you. With that being said, using a mortgage calculator is a great easy way to get an idea and play with different numbers. This helps you to see what you would feel best with for a mortgage or possibly think about breaking your mortgage and redoing it.
If you want to know exact numbers and information then you should contact your mortgage broker. They will be able to provide you with the right information to use in the calculators or give you the answers you are looking for if you don’t want to use one.
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Monthly Debt and Obligations Should Include:
Frequently Asked Questions
While majority of the mortgage regulation in Canada is consistent across the provinces (minimum down payment 5%; maximum amortization period 35 years), there are some things that do vary.
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CMHC insurance or mortgage default insurance, is mandatory in Canada for down payments between 5% and 19.99%, which are known as high-ratio mortgages. It is calculated as a percentage applied to your total mortgage amount. For more information on mortgage default insurance rates, please visit our mortgage default insurance page.
An amortization schedule shows your monthly payments over time and also indicates the portion of each payment paying down your principal vs. interest. The maximum amortization in Canada is 25 years on down payments less than 20%. Though your amortization may be 25 years, your term will be much shorter. With the most common term in Canada being 5 years, your amortization will be up for renewal before your mortgage is paid off, which is why our amortization schedule shows you the balance of your mortgage at the end of your term.
In this market, banks almost always use income to ensure mortgage affordability, regardless of the amount of down payment. How they calculate affordability varies from lender to lender but for the most part, four times your gross income is a good rule of thumb.
Your Maximum Mortgage Calculation is based on two simple rules that lenders use to determine how much of a mortgage you can afford. The first rule is:
- Your monthly housing costs should not exceed 32% of your gross monthly household income (this can be up to 40% with some banks). Housing costs include monthly mortgage payments, taxes and heating expenses. If applicable, this sum should also include half of monthly condominium fees.
- Your entire monthly debt load should not be any more than 42% of your gross monthly income. This includes housing costs, and other debts such as car payments, personal loans, credit card payments and the like.
Most lenders will accept down payment funds that are a gift from family as an acceptable down payment. A gift letter signed by the donor is usually required to confirm that the funds are a true gift and not a loan. Where the mortgage requires mortgage loan insurance, Canada Mortgage and Housing Corporation requires the gift money to be in the purchaser's possession before the application is sent in to them for approval. Where mortgage loan insurance is provided by Genworth, this is not a requirement.