When it comes to getting a mortgage, everyone wants to know the bottom line: How much am
I going to have to pay every month for my mortgage? The mortgage payment calculator uses the amount of your mortgage,
how often you make the mortgage payments, and the interest rate that you're getting from your lender in order to figure
how much your mortgage payments will be.
Glossary
AMORTIZATION PERIOD
• Amortization period refers to the number of years it will take to pay down the principal balance of your mortgage in full. The most common amortization period is 25 years.
BRIDGE LOAN
• Also known as interim financing, a bridge loan is a second mortgage that is paid of immediately following the closing date of the buyer's current home. Bridge financing is typically used when the sale of the buyer's current home closes after the purchase of his or her new home closes.
CLOSED MORTGAGE
• A mortgage that, for a specified term, locks you into paying the mortgage for that period of time. It also locks in a mortgage rate, which doesn't increase/decrease if rates do.
Generally, if you break a closed mortgage, you will be required to pay three months interest payments as a penalty. The most common term for a closed mortgage is five years.
COMPOUND PERIOD
•The number of times per year that the interest rate is compounded. In Canada, mortgage interest rates are compounded semi-annually, or twice per year.
CONDO FEE
• Condo fees consist of the monthly payments collected that cover a resident's shared expenses for the upkeep of all common areas.
DOWN PAYMENT
• The amount of cash that the buyer can initially invest in the property. The down payment is the difference between the purchase price and the value of the mortgage loan.
HIGH-RATIO MORTGAGE
• A mortgage that is more than 80% of the home's appraised value or purchase price (whichever is less). High-ratio mortgages must be insured to protect the lender against default.
INTEREST RATE
• The percentage of the mortgage loan charged by the lender for use of the lender's money. In Canada, this mortgage rate is compounded semi-annually, or twice per year.
MORTGAGE AMORTIZATION
• Mortgage amortization is the process of repaying a mortgage loan
MORTGAGE INSURANCE
• This is insurance that is required for high-ratio mortgages. It protects the lender in the event that a borrower defaults on a mortgage. The three mortgage insurers in Canada are CMHC (Canadian Mortgage and Housing Corporation), Genworth, and AIG. Prior to the creation of CMHC, Canadians could not purchase a home without a 25% down payment.
MORTGAGE LIFE INSURANCE
• This is insurance that pays off the mortgage in the event of death or disability. To read more about mortgage life insurance, please click here.
MORTGAGE LOAN
• A mortgage loan is a loan secured by real estate owned by the borrower.
MORTGAGE PAYMENT
• A mortgage payment is a periodic amount paid to a mortgage holder for repayment of a mortgage loan.
MORTGAGE PRINCIPAL
• Mortgage principal is the outstanding balance of your mortgage.
MORTGAGE RATE
• Mortgage rate is the interest that a mortgage borrower will pay for money borrowed against a mortgage.
MORTGAGE TERM
• A mortgage term is the length of time, usually in years, in which the parameters of a mortgage have legal effect.
MORTGAGEE
• The party that advances the funds for a mortgage loan; the lender.
MORTGAGOR
• The party that uses their home as a security for a mortgage; the borrower.
OPEN MORTGAGE
• This is a mortgage with no term, which means that you can pay off your mortgage either fully or partially at any time with no penalty. Open mortgage rates are usually higher than closed mortgage rates.
PRE-APPROVED MORTGAGE
• A pre-approved mortgage qualifies you for a loan amount before you start looking for houses. It also acts as a rate hold, guaranteeing you today’s interest rates until up to 120 days in the future
PRINCIPAL
• The amount of money borrowed or still owing on a mortgage.
REALTOR®
• A real estate agent who is a member of a local real estate board, the Canadian Real Estate Association and a provincial association.
TITLE INSURANCE
• Insurance that protects the owner or mortgagee of the property from any lawsuits or claims arising from a defective title.