Use the Rate Hub Mortgage Calculator to estimate your monthly mortgage payments, determine the maximum loan amount you can afford, or find out your remaining amortization period. Simply leave the variable you wish to solve for blank.
Mortgage Payment Calculator
Calculated Result:
Mortgage Payment Calculator Formula
The calculation is based on the present value of an annuity formula, assuming monthly compounding, which is standard for Canadian mortgages (hence the ‘Rate Hub’ focus).
Variables Explained
The calculator needs three out of four variables to solve for the unknown:
- Loan Amount (P): The principal amount borrowed from the lender.
- Annual Interest Rate (R): The yearly rate charged by the lender, entered as a percentage (e.g., 5.0).
- Amortization Period (Y): The total length of time, in years, over which the mortgage debt will be repaid.
- Monthly Payment (PMT): The fixed amount paid each month towards principal and interest.
Related Calculators
- Affordability Calculator
- CMHC Premium Estimator
- Refinance Savings Calculator
- Debt Consolidation Calculator
What is a Rate Hub Mortgage Calculator?
A “Rate Hub” style calculator is designed to provide Canadian consumers with quick, reliable estimates of their mortgage payments based on current market rates and common amortization rules (like required monthly or semi-annual payments). It helps prospective homeowners budget effectively.
Understanding your monthly commitment is the first step in the home-buying process. This tool accounts for the principal loan amount, the interest rate you secure, and the total duration (amortization) you choose to pay it off, providing clarity on one of life’s largest financial decisions.
How to Calculate Mortgage Payments (Example)
Let’s use an example to calculate the Monthly Payment (PMT) for a $300,000 loan:
- Define Variables: Principal (P) = $300,000. Annual Rate (R) = 4.0%. Amortization Years (Y) = 25.
- Calculate Periodic Rate (i): $i = 4.0\% / 12 / 100 = 0.003333$.
- Calculate Total Payments (n): $n = 25 \text{ years} \times 12 \text{ months} = 300$.
- Apply Formula: $PMT = \$300,000 \times [ 0.003333 \times (1 + 0.003333)^{300} ] / [ (1 + 0.003333)^{300} – 1 ]$.
- Result: The resulting monthly payment is $1,581.82 (rounded).
Frequently Asked Questions (FAQ)
A longer amortization period (e.g., 30 years vs. 20 years) lowers your monthly payment but significantly increases the total amount of interest you pay over the life of the loan.
What interest rate should I use?Use the best rate currently available to you (a pre-approved rate) or the posted benchmark rate from the Bank of Canada for the most accurate estimate.
Is property tax included in this calculation?No, this calculator only determines the Principal and Interest (P&I) portion of your payment. You must add estimated property taxes, insurance, and utilities (PITI) for your total monthly housing cost.
Can I solve for the Loan Amount?Yes. If you know your target monthly payment, the annual rate, and your desired amortization period, you can leave the Loan Amount field blank to see the maximum principal you can afford.