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How Much Can You Afford to Pay for your next home ?
The terms and interest rates available to you are heavily dependent upon your credit rating. For information on credit scoring and how this may affect you please refer to our page on Understanding Credit Rating.
If you already have a mortgage and want to know how much you still owe on it, then our Amortisation Calculator may be of help to you.
Try the income based payment calculator to see how much you can afford in monthly payments. Then use this mortgage calculator to figure out how much you can afford to spend on your new home. There are two ways to use this calculator:
Caution: This mortgage calculator is for mortgages in Canada. Mortgages in Canada differ in small but important ways from mortgages in many other countries. For example, in Canada, compounded mortgages are required to be calculated semi-annually, not in advance. The results you get from this mortgage calculator should therefore only be considered approximate for a lender operating in Canada and offering a mortgage in Canada. Your lender's calculations are the final authority since the terms of your mortgage may vary in small but important ways.
CAUTION: this calculator is only a guide. The basis for this calculation is from equation 3.2.13 on page 227 of Discrete Mathematics for Computer Scientists by Joe Mott, be Kandel, and Ted Baker.
This calculator applies only to monthly payments for Canadian mortgages, which are compounded semi-annually, not in advance. This affects the interest rate, which must first be made semi-annual (cut in half), then compounded (squared) to get the actual annual interest rate. Then, for the purposes of the formula, you must take the 12th root and apply a term of 12 times the years to get a monthly payment. Weekly and bi-weekly payments can be similarly derived on the basis of 52 or 26 rather than 12 payments per year.
Results may therefore vary depending upon how your mortgage is compounded (eg. monthly, quarterly, annually), whether there is a gross-up for your first payment, and whether there are any fees included. For an example of some of these effects see the TD Canada Trust mortgage calculator. Only what the institution granting your mortgage states as being your payment can be considered true and accurate for your mortgage contract. Read it carefully before you sign.
If you are in the Waterloo Region of Ontario, Canada, Dot can recommend some excellent mortgage brokers who have helped her clients in the past to:
There are a number of "tricks of the trade" which can help you out of a tight spot. Never give up hope - ask for advice instead.