Mortgage Help File

Calculate the Principal

The principal is the sum borrowed or amount of the mortgage.  The Mortgage Calculator will help you determine how much you can afford to borrow.  Simply enter the interest rate, amortization period and a payment amount you would be comfortable with, then click OK next to the principal field.  This calculation assumes that only regularly scheduled monthly mortgage payments are made. 

Calculate the Payment

Mortgages are repaid in regular instalments (typically monthly).  Given a specific interest rate, amortization period and principal, the Mortgage Calculator will determine the required monthly payment.  This calculation assumes that only regularly scheduled monthly mortgage payments are made. 

Calculate the Interest Rate

Given the principal, a monthly payment amount, and an amortization period, the Mortgage Calculator will determine the interest rate you need to obtain on this mortgage.  If such a rate is not available, you will have to adjust one or more variables.  This calculation assumes that only regularly scheduled monthly mortgage payments are made. 

Calculate the Amortization Period

The amortization period is the time period during which your mortgage is paid off.  Most mortgages are amortized over 25 years.  Altering the interest rate or principal will cause the amortization period to vary. 

On this calculation only, you can also vary the following:

Payment Frequency
Frequency refers to how often the mortgage payments are made.  By increasing the number of regularly scheduled mortgage payments you can reduce interest charges and the time needed to pay off your mortgage.  As an example, adjust the frequency of payments from monthly to bi-weekly to see the difference. 

Prepayments
Most mortgages permit the holder to prepay a certain amount of the mortgage on its anniversary date.  Over the life of the mortgage, these prepayments can substantially shorten the amortization period and reduce the total interest paid.  Compare different scenarios by entering different prepayment amounts. 

This calculation assumes the same payment that was used on the previous screen.  To alter it, click OK next to any other variable, enter a payment amount on that screen, and click OK next to amortization period to return to this calculation. 

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