Mortgage Tools
Mortgage Affordability Made Easy with CMI's Mortgage Tools
House hunting? Shopping for a mortgage? Trying to understand how different interest rates, amortization rates and down payments will affect the affordability of the mortgage your need to finance your dream home?
CMI's mortgage calculator allows you to quickly and easily see how changing the interest rate, principal or amortization of your mortgage will affect your payments.
Wondering where to begin? Check out the following "Mortgages Glossary" and then turn to CMI's Mortgage Calculator to begin your mortgage planning.
The latest news and information on Canada's mortgages and real estate markets is available to you on CMI's "Mortgage News in Canada" blog.
CMI provides the following "Mortgage Glossary" to help guide you through your mortgage affordability calculations.
Mortgage Glossary - Key Terms in Understanding Mortgage Affordability
Amortization Period - The total number of years over which regular payments will pay off your mortgage in full. The typical amortization period is usually 25 years for a new mortgage, however longer amortizations of up to a maximum of 40 years are now available. Making bi-weekly payments or periodic lump sum payments to an open mortgage will substantially reduce the time it takes to pay off your mortgage.
Closed Mortgage - A mortgage agreement that cannot be prepaid, renegotiated or refinanced before maturity, except according to its terms. Closed mortgages have limited lump sum payment options.
Conventional Mortgage - A mortgage that does not exceed 80% of the purchase price of the home. Under the Bank Act, high-ratio mortgages that exceed this 80% limit must be insured against default by the Canada Mortgage and Housing Corporation or another regulated mortgage insurer.
Equity - The value of a home or property over and above all mortgages and other claims or interests registered against the property. Typically, this is the difference between the market value of the property and the mortgage and any second mortgage or loan registered against the property.
Fixed-Rate Mortgage - A mortgage that specifies the interest rate that will be paid over the term of the mortgage (as opposed to a variable-rate mortgage).
High Ratio Mortgage - A mortgage where the down payment is less than 20% of the purchase price or appraised property value and which therefore requires mortgage insurance from the CMHC or another regulated mortgage insurer under the Bank Act. (A high-ratio mortgage is the opposite of a conventional mortgage.)
Home Equity - The difference between the price for which a home could be sold (market value) and the total amount of the mortgages and/or other debts registered against it.
Mortgagee and Mortgagor - The lender is the mortgagee and the borrower is the mortgagor. (Think, "e" as in lend, "or" as in borrow.)
Open Mortgage - A mortgage which can be prepaid at any time before the end of the mortgage term, without penalty.
Prepayment Charge - A fee charged by the lender when the borrower prepays all or part of a closed mortgage before the expiration of the term or more quickly than as set out in the terms of the mortgage agreement.
Prepayment Option - The ability to prepay all or a portion of the principal balance. Periodic prepayments will substantially reduce overall interest payments and the amortization period of the mortgage
Principal - The amount of money borrowed for a new mortgage.
Refinancing - Renegotiating your existing mortgage agreement. Refinancing will usually be necessary several times over the amortization period, as the term of a mortgage will be shorter than the amortization period in most instances. Refinancing may also be utilized to increase the principal through a home equity loan.
Renewal - At the end of a mortgage term, the mortgagee may renew or "roll over" the mortgage with the existing mortgagor with the new terms and conditions agreed to by both parties. Alternatively, the may seek alternative financing from another mortgagor and the subsequent lender will repay the initial mortgagor in full.
Variable Rate Mortgage - A mortgage where the interest rate changes during the term of the market according to market conditions - also referred to as a floating rate mortgage.
Mortgage Affordability Made Easy with CMI
The expert and experienced mortgage brokers at CMI can help make your home ownership dreams a reality. CMI's brokers will canvass their network of over 250 carefully selected lenders to find the best interest rates and loan terms that will help make your mortgage affordability calculations a reality!
