Has a property caught your eye or are you shopping for a home, condo, or duplex? To determine if your project is feasible, the Multi-Prêts mortgage payment calculator is at your service.
The calculator is programmed to simulate your mortgage financing considering different scenarios. It estimates your monthly payment based on the loan, taking into account the repayment period and your down payment. Ultimately, you get an overview of your mortgage.
And don’t worry, you mustn’t be a math whiz to navigate our tool!
The Multi-Prêts Payment Calculator
Multi-Prêts mortgage
Down payment tips
When it comes to mortgages, the rule of thumb is simple: the maximum amount you can borrow depends on your down payment. The more capital you bring to the table, the better your chances of obtaining a healthy sum of money from a lender are. Your down payment should consider the purchase price of the property, regardless of the liquidity you are prepared to provide.
Note that regardless of your down payment, it is possible to choose a shorter amortization period, such as fifteen or twenty years, assuming you qualify. Alternatively, the maximum amortization for a mortgage with less than 20% of a down payment is twenty-five years. However, a thirty-year amortization is possible for clients providing a down payment of 20% or more. In brief, insured loan with a down payment inferior to 20% cannot be financed over a 30-year amortization period.
When a residential property costs $500,000, a minimum down payment of 5% would be $25,000. If the property costs $600,000, then the minimum down payment will be that same $25,000 plus 10% of the $100,000 beyond the first $500,000 of its sales price — for a total down payment of $35,000. Certainly, if you want to prove your stability to a lender, your ability to have accumulated a substantial down payment demonstrates your healthy savings habits.
However, providing a higher down payment does not guarantee a borrower’s ability to repay their loan. For example, a younger borrower might only have a 5% down payment, but earns $200,000 annually. Their debt-to-income ratio will typically be low, while their earnings categorize them as someone with high repayment capacity. On the other hand, a retiree may provide a 50% down payment, but receive far less pension income. In turn, they appear less capable of repaying a mortgage loan, despite their down payment.
Lenders expose themselves to higher risk when financing real-estate purchases superior to one million dollars; therefore, these acquisitions require a larger down payment. Also, if you commit to a reasonable amortization period, you remain on the safe side! However, you should know lenders do not necessarily favour 25-year amortization periods over 30-year periods.
Lastly, when purchasing a three or four-unit multiplex – as an occupying owner – your down payment must be equal to or greater than 10%.
Remember, mortgage insurance is only required when borrowers provide less than 20% of a down payment.
The Multi-Prêts mortgage calculator simulates the cost of the loan according to the selected repayment period. The more you reduce the amortization (or the repayment period), the higher your monthly payment. On the other hand, stretching the payments over a longer period of time, reduces your monthly payments. With rising home prices, it can be challenging for borrowers to qualify for loans financed over 10 to 15-year amortization periods. In brief:
01
If you have a down payment inferior to 20%, you can choose an amortization (repayment) period of up to 25 years;
02
If you provide a down payment equal or superior to 20%, you can opt for an amortization period up to 30 years.
The Multi-Prêts Payment Calculator
A 30-year period is recommended for clients respecting a tighter monthly budget. This option is also a great choice for clients struggling to qualify over 25 years.
Notably, there is almost always a small premium charged on the interest rate when opting for a 30-year amortization.
Use the mortgage calculator today to simulate the cost of your loan based on the amortization period, interest rate, payment frequency and your down payment. Need advice?
Ask a broker of Team Distinction to speak with you today!
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