Use our mortgage calculator to estimate your monthly payments and understand your borrowing capacity with RBC Canada.
How to Use the Mortgage Calculator
This mortgage calculator will help you estimate your monthly mortgage payments. Here’s how to use it:
- Enter the Home Price which is the total price of the home you plan to buy.
- Enter the Down Payment, the amount you will pay upfront.
- Enter the Loan Term in years, which is the duration over which you will repay the loan.
- Enter the Annual Interest Rate (APR) of the loan.
- Enter the Annual Property Tax you expect on the home.
- Enter the Annual Home Insurance premium.
- Click the Calculate button.
How It Calculates the Results
The calculator uses the following formula for the monthly mortgage payment:
M = P[r(1+r)^n]/[(1+r)^n – 1]
Where:
- P is the loan amount (home price minus down payment)
- r is the monthly interest rate (annual rate divided by 12)
- n is the number of payments (loan term in years times 12)
The calculator then adds the monthly property tax and home insurance to the monthly mortgage payment to get the total monthly payment.
Limitations
This calculator provides an estimate based on the values you input. Actual payments may vary due to property tax reassessments, changes in home insurance premiums, or other factors. Always consult with your financial advisor and lender for accurate results.
Use Cases for This Calculator
Determine Monthly Payment
You want to understand your monthly mortgage payments based on different loan amounts and interest rates. By inputting your desired mortgage amount, interest rate, and loan term, you can get an accurate estimate of what you will pay each month.
This feature allows you to visualize how much of your budget will be allocated to mortgage payments, helping you make informed financial decisions when purchasing a home.
Understand Total Interest Paid
You may be curious about the total interest you will end up paying over the life of the mortgage. By incorporating the loan term and interest rate into your calculations, the calculator reveals how much you’ll pay in interest, equipping you with a more comprehensive financial overview.
<pThis insight can motivate you to consider shorter loan terms or explore options to pay off your mortgage faster, ultimately saving you money.Compare Different Scenarios
You want to evaluate various financing options to determine which mortgage plan best suits your needs. By allowing you to compare different interest rates, loan amounts, and terms side by side, the calculator simplifies this critical decision-making process.
This scenario comparison helps you identify the most cost-effective option and empowers you to negotiate better terms with lenders.
Assess Affordability
You need to assess how much you can afford to borrow based on your income and expenses. By entering your gross monthly income alongside your other monthly obligations, the calculator helps you gauge how much of your budget can be allocated toward a mortgage.
Understanding your borrowing capacity can prevent financial strain and ensure you choose a mortgage that fits comfortably within your lifestyle.
Evaluate Impact of Down Payment
You’re wondering how varying your down payment influences your mortgage. Adjusting the down payment amount in the calculator enables you to see immediate changes in your monthly payment and total interest paid.
This tool can encourage you to save for a larger down payment, ultimately reducing your mortgage burden and potentially eliminating the need for private mortgage insurance.
Identify Amortization Schedule
You want details about how long it will take to pay off your mortgage and how payments are applied over time. The calculator will provide an amortization schedule, showing you monthly payment breakdowns, how much goes toward principal versus interest, and the remaining balance after each payment.
This detailed schedule can enhance your financial planning and help you feel secure about your mortgage commitment.
Simulate Extra Payments
You’re interested in how making extra payments can affect your mortgage duration and overall interest costs. The calculator allows you to input potential extra payment amounts, revealing significant savings in both time and total interest paid.
<p strategizing extra payments can help you fast-track your homeownership journey and potentially build equity more rapidly.Account for Property Taxes & Insurance
You need to factor in additional costs like property taxes and homeowner’s insurance when determining your monthly budget. The calculator lets you input these expenses along with your mortgage payment to give a complete picture of your monthly housing costs.
This comprehensive view can prevent unpleasant surprises when it comes time to pay your mortgage and helps you budget more accurately.
Explore Refinancing Options
You might be considering refinancing your current mortgage to take advantage of lower interest rates. By entering your existing loan details and potential new terms, the calculator helps assess whether refinancing makes financial sense.
This can provide clarity around savings over time, allowing you to weigh the costs versus benefits effectively.
Find the Best Loan Term
You want to understand how varying the length of your loan impacts your payments and total interest. By adjusting the loan term in the calculator, you can discover the balance between lower monthly payments and total interest costs.
This information helps you choose a term that aligns with your financial situation and future goals while ensuring you’re not overextending your budget.