What is the Ontario mortgage calculator?
With an Ontario mortgage calculator, you can estimate your mortgage repayment costs quickly and easily. In addition, you can see how different mortgage options compare regarding repayment costs by modifying the values you use as input. Doing so will help you identify the mortgage solution that represents your best value.
How to use the Ontario mortgage calculator on Finanso?
The Finanso Ontario mortgage calculator is easy to use. Just fill out the required fields with the key parameters of your mortgage — the home price, down payment, loan term, interest rate, amortization period, payment frequency, and additional details, if necessary. Then, hit the "Calculate" button and get the results.
Option 1. Calculation based on the property price in Ontario
To perform this operation, you will need our simple mortgage calculator that takes into account the loan amount, the term, and the repayment method. You may also be asked to specify the mortgage type or the interest rate if there are several mortgage options and only one calculating tool available on the page. Details necessary for the calculation:
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The cost of the property. This field suggests you enter the property price you plan to purchase. Remember that you must make a down payment of at least 5% of the property's price.
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The down payment. It is the initial up-front partial payment you have to make at the time of finalizing the transaction. You must purchase mortgage default insurance if your down payment is less than 20%.
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The loan term. The mortgage term is the time your mortgage contract is in effect, while amortization is the time it will take you to pay your mortgage in full. The maximum amortization period in Ontario for insured residential mortgages is 35 years.
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The mortgage interest rate. Our calculator takes into account the region's peculiarities. By default, the calculator has the average interest rate for the region where you calculate. In addition, minimum and maximum values for the country are embedded. You will see a notification if you input a value that does not correspond to the country.
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Payment type. The calculator features the possibility to specify the mortgage type: annuity or linear. Annuity payments are certainly convenient for both the borrower and the lender. Still, the client will expect a more significant overpayment due to a slower principal repayment.
To get an idea of an approximate mortgage payment in Ontario, enter the values for the essential parameters of your mortgage into the designated fields in the Finanso Ontario mortgage payment calculator.
Let's assume you want to purchase a house for $820,000 and make a $250,000 down payment. With a 5-year fixed closed mortgage principal of $570,000 paid over 25 years at a 4.77% interest rate on a bi-weekly basis, your bi-weekly payment will be $1,494. The total payments over the term will constitute $194,249 — $67,349 toward the principal and $126,900 toward the interest.
Option 2. Calculation based on the loan amount in Ontario
Mortgage calculators suitable for such operations feature the early repayment calculation option. The difference between this tool and the simple one is that it is possible to evaluate the mortgage details at once and see the change in the debt amount if early repayment occurs, which may be convenient when you intend to reduce the overpayment. Details necessary for the calculation:
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The loan amount. This is the money you receive from the lender to purchase real estate (without considering the down payment). You might consider reviewing the maximum mortgage amounts the Ontario lenders grant at this point.
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The loan term. The mortgage term is the time your mortgage contract is in effect, while amortization is the time it will take you to pay your mortgage in full. The maximum amortization period in Ontario for residential mortgages is 35 years.
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The interest rate. Our calculator considers the region's peculiarities. By default, the calculator has the average interest rate for the area where you calculate. In addition, minimum and maximum values for the country are embedded. You will see a corresponding notification if you input a value that does not correspond to the country.
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Early repayment. This field allows you to choose the type of early repayment (partial or full). Select the repayment date and the amount you are going to pay.
Option 3. Calculation based on the total cost of purchasing a property in Ontario
A mortgage calculator taking into account more details is necessary to calculate the total cost of acquiring a property. This calculator differs from the previous tools in that it considers the tax burden, such as annual property taxes, default insurance, and additional expenses, for example, an origination or a brokerage fee. In addition, it allows for more accurate calculations. Details necessary for the calculation:
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The cost of the property. In this field, enter the cost of the property you are planning to purchase. Remember that you must make a down payment of at least 5% of the property's price.
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The down payment. It is the initial up-front partial payment you have to make when at the time of finalizing the transaction;
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The loan term. The mortgage term is the time your mortgage contract is in effect, while amortization is the time it will take you to pay your mortgage in full. The maximum amortization period in Ontario for residential mortgages is 35 years.
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The interest rate. Our calculator takes into account the region's peculiarities. By default, the calculator has the average interest rate for the region where you calculate. In addition, minimum and maximum values for the country are embedded. You will see a corresponding notification if you input a value that does not correspond to the country.
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Additional data.
Mortgage loan term in Ontario
The mortgage loan term in Ontario refers to the length of time over which a borrower repays the loan to the lender. In Ontario, the most common loan terms are:
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15-year fixed-rate mortgage: A loan term of 15 years with a fixed interest rate, meaning the interest rate and monthly payment will remain the same for the life of the loan.
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30-year fixed-rate mortgage: A loan term of 30 years with a fixed interest rate, meaning the interest rate and monthly payment will remain the same for the life of the loan.
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Adjustable-rate mortgage (ARM): A loan term with an interest rate that can fluctuate over time, meaning the monthly payment may change.
The choice of the loan term will depend on the borrower's financial situation, goals, and risk tolerance. A shorter loan term usually results in a higher monthly payment but a lower overall cost. In contrast, a longer loan term usually results in a lower monthly payment but a higher overall cost. It's best to consult a financial advisor and lender for personalized guidance on the best loan term for your specific needs and situation.
What is the minimum mortgage amount in Ontario?
The government sets no minimum mortgage amount in Ontario. The minimum mortgage amount can vary by lender, with some requiring a minimum mortgage amount of $50,000 or more. It's best to check with individual lenders for their specific requirements. The minimum mortgage amount can also be impacted by factors such as the type of mortgage, the borrower's credit score, and income.
What is the maximum mortgage amount in Ontario?
The lender determines the maximum mortgage amount in Ontario based on the borrower's income, credit history, and other factors. Still, it is usually up to 80% of the property's value.
In Canada, the maximum mortgage amount that can be insured by the Canadian Mortgage and Housing Corporation (CMHC) is $1,000,000.
How much do I need for a down payment on a mortgage loan in Ontario?
A down payment on a mortgage loan in Ontario is a lump sum payment made by the borrower at the time of purchasing a property. The down payment represents a portion of the property's purchase price and reduces the amount the borrower needs to borrow from the lender.
Typically, a down payment of 5-20% of the property value is required for a mortgage loan in Ontario. However, some lenders may offer low or no down payment options, such as government-backed loans. The specific requirements and options will depend on factors such as the type of mortgage, the lender, the borrower's credit score, and income.
If your down payment is less than 20%, you must purchase mortgage insurance.
It's best to check with individual lenders for their specific requirements and options for down payments on mortgage loans in Ontario.
Who can take out a mortgage in Ontario?
In Ontario, anyone who meets the lender's eligibility criteria can take out a mortgage. The eligibility criteria for a mortgage can vary by lender but generally include the following:
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Age: Most lenders require the borrower to be at least 18 years old.
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Income: The borrower must have a stable source of income to repay the mortgage.
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Credit score: The borrower's credit score must meet the lender's minimum requirements, which can vary.
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Employment: The borrower must have a stable employment history.
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Down payment: The borrower must have a down payment, which can range from 5-20% of the property value, depending on the lender's requirements.
It's best to check with individual lenders for their specific eligibility criteria for taking out a mortgage in Ontario. Remember that meeting the eligibility criteria does not guarantee approval, as the lender will also consider the property type, location, and value factors.
Types of mortgages in Ontario
There are several types of mortgages available in Ontario, each with its own unique features and terms. The most common types of mortgages include:
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Fixed-rate mortgage: A mortgage with a fixed interest rate, meaning the interest rate and monthly payment will remain the same for the life of the loan.
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Adjustable-rate mortgage (ARM): A mortgage with an interest rate that can fluctuate over time, meaning the monthly payment may change.
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Conventional mortgage: A mortgage that is not insured by the government and typically requires a down payment of at least 20% of the property value.
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High-ratio mortgage: A mortgage in which the down payment is less than 20% of the property value and is insured by the government.
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First-time homebuyer programs: Special mortgage programs designed to help first-time homebuyers enter the housing market, which may offer lower down payment requirements and more favorable terms.
It's best to consult a financial advisor and lender for personalized guidance on the best type of mortgage for your specific needs and situation, as the type of mortgage you choose will impact your monthly payments, interest rate, and overall cost of the loan.
Where to get a mortgage in Ontario?
You can get a mortgage in Ontario from various sources, including:
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Banks: National and regional banks are a common source of mortgages. For example, RBC, TD Bank, Scotiabank, BMO, CIBC, and National Bank, and smaller-sized banks like Equitable Bank, Laurentian Bank, HSBC, Tangerine Bank, Motusbank, ICICI Bank Canada, Canadian Western Bank, Manulife.
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Credit Unions: Some credit unions offer mortgages to their members. for example, PACE, FirstOntario Credit Union, Alterna Savings, Community Trust, DUCA, Kawartha Credit Union, Meridian, and Desjardins.
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Mortgage Brokers: Mortgage brokers act as intermediaries between borrowers and lenders and can help you find the best mortgage for your needs.
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Online Lenders: Online lenders offer mortgages entirely online, from application to closing.
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Direct Lenders: You can work with direct lenders without needing a broker.
It's best to compare the rates, terms, and fees offered by multiple sources to find the best mortgage for your needs. Keep in mind that each lender may have different requirements, such as minimum credit score, income, and down payment, so it's important to review the eligibility criteria before applying.
FAQ
How much is the average house payment in Ontario?
The average house payment in Ontario can vary widely depending on several factors, such as the property's purchase price, interest rate, type of mortgage, and down payment.
As of 2022, the average home price in Ontario was around $812,000. With a 20% down payment and a 30-year fixed-rate mortgage at a 3% interest rate, the average monthly mortgage payment would be around $3,000.
It's important to remember that this is just an estimate, and your actual monthly payment will depend on your specific situation, including the property's purchase price, interest rate, and mortgage terms. Therefore, it's best to consult a financial advisor and lender for a personalized estimate of the average house payment in Ontario for your specific needs.
What credit score do you need for a mortgage in Ontario?
The minimum credit score needed for a mortgage in Ontario can vary by lender but typically ranges from 600 to 680. However, some lenders may require a higher credit score, and a higher score can result in more favorable interest rates and loan terms.
It's important to keep in mind that having a good credit score is just one of many factors that lenders consider when approving a mortgage. Other factors include income, employment history, debt-to-income ratio, and down payment.
It's best to check with multiple lenders for their specific credit score requirements for a mortgage in Ontario and work to improve your credit score before applying if necessary. A financial advisor can also provide guidance on improving your credit score and increasing your chances of being approved for a mortgage.
How much do you have to put down on a property in Ontario?
The amount you need to put down on a property in Ontario can vary depending on the type of mortgage you choose and the lender's requirements.
For a conventional mortgage, where the down payment is less than 20% of the property value, you typically need to put down at least 5% of the purchase price.
For a high-ratio mortgage, where the down payment is less than 20% of the property value, you may need to put down as little as 5% or as much as 19.99% of the purchase price, and the government will insure the remaining balance.
It's important to remember that the more you put down as a down payment, the lower your monthly mortgage payment will be. Therefore, consulting a financial advisor and lender for personalized guidance on the best down payment amount for your specific needs and situation is best.
How much house can I afford in Ontario, making 100K a year?
How much house you can afford in Ontario while making 100K a year will depend on several factors, including your monthly expenses, debt-to-income ratio, and the interest rate on your mortgage.
A general rule of thumb is to aim for a debt-to-income ratio of no more than 36% to 43%. This means that your total housing payment (including mortgage principal, interest, taxes, and insurance) should not exceed 36% to 43% of your gross monthly income. So, for example, if you make 100K a year, or roughly 8,333 dollars a month, you could afford a monthly housing payment of $3,000 to $3,600.
It's important to remember that this is just a rough estimate, and your actual monthly payment will depend on your specific situation and the type of mortgage you choose. Therefore, it's best to consult a financial advisor and lender for a personalized estimate of how much house you can afford in Ontario while making 100K a year.
What would the monthly payments on an $800,000 house be in Ontario?
The monthly mortgage payment on an $800,000 mortgage in Ontario will depend on several factors, including the interest rate, mortgage type, and loan term.
For example, with a 30-year fixed-rate mortgage at a 3% interest rate, the monthly mortgage payment on an $800,000 mortgage would be approximately $3,000.
It's important to remember that this is just an estimate, and your actual monthly payment will depend on your specific situation, including the interest rate and mortgage terms. Therefore, it's best to consult a lender for a personalized estimate of the monthly mortgage payments on an $800,000 mortgage in Ontario.
