## Mortgage Payment Calculator

For the majority of Canadians, buying a home will be the biggest purchase they will ever make, and getting a mortgage is an essential part of this process. But how do you ensure that you get a mortgage that you can also pay in the long term? That’s where a mortgage payment calculator comes in.

## Why Use a Mortgage Payment Calculator?

How much a mortgage will eventually cost you in the long run can be difficult to comprehend, especially when you factor in interest. A mortgage payment calculator is an indispensable tool that will help you understand what your payments will be over time. It also gives you a more accurate idea of ​​what you can afford.

Using a mortgage calculator to estimate your payments will give you a more realistic picture of the options available and help you assess mortgage products. In short, a mortgage payment calculator can help you see how a mortgage fits into your current financial plans, and how it could affect your future goals.

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## How are mortgage payments calculated?

Entering a few key numbers into a mortgage payment calculator will give you a reliable estimate of your regular payment amount. These are the main variables that determine your mortgage payments:

To calculate your mortgage payments, enter this information into the mortgage amortization calculator. (The calculator automatically displays the best rates available in your area, or you can enter your own rate.) The calculator then displays monthly payments in four different scenarios, based on the information you provide. You can change any of the variables to see how your normal mortgage payment would be affected.

If your down payment represents less than 20% of the purchase price, the cost of mortgage default insurance is automatically calculated and included in your regular mortgage payment.

## How to Calculate Your Mortgage Payments Manually

When you need to quickly calculate what your mortgage payment will be, you should probably use a mortgage payment calculator. However, if you prefer to write things out, or if you just want to understand the math behind your mortgage payments, you can use the formula below:

Monthly Payment = P x (I x (1 + I)^N ) / ((1 + I)^N – 1)

P = Mortgage principal
I = Monthly Interest
N = Number of payment terms

This post MoneySense Toolkit: The Mortgage Payment Calculator

was original published at “https://www.moneysense.ca/spend/real-estate/mortgages/mortgage-payment-calculator/”