Downtown Toronto Real Estate News - Realtor Wayne Chung

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How to Calculate Your TD Mortgage Payment

If you’re thinking about getting a mortgage with TD Canada Trust, you might be wondering what your mortgage payment might look like. Assuming you’ve found the home of your dreams (maybe not in your dreams but in your price range given the new mortgage rules), you can start the process of figuring out your mortgage payments.

In addition to the purchase price of your new home, you’ll need to decide on how large of a down payment you’ll make and how long you want to keep your mortgage (the amortization period). After you’ve made those decisions, you can enter those numbers along with your mortgage rate into the TD mortgage calculator to determine your mortgage payments.

Mortgage payment calculators are an excellent way for you to figure out how much your payments will be for your new place and what changes you can make to affect your mortgage payments. By using a mortgage calculator, you can see the effects of what different down payments, amortization periods, payment frequencies, and mortgage rates have on your mortgage payment.

A key component you should watch out for when determining your mortgage payments is the total interest you’ll pay during the life of your mortgage. Consider the following strategies to reduce the amount of interest you pay on your mortgage:

  • Increase the size of your down payment—The larger your down payment is, the smaller your total loan value, which will result in you paying less interest as you’re paying interest on a smaller amount of principal.
  • Shorten your amortization period—By reducing your amortization period, you’ll pay off your mortgage faster and pay less interest. Since you’re borrowing for a shorter period of time, your payments will be larger but you won’t be paying interest for as long. This way more of your payments will be going to pay off the principal rather than interest.
  • Increase your payment frequency—By making bi-weekly instead of monthly payments, you’ll be able to reduce the amount of interest you pay. Increasing the frequency of your payments reduces the amount of principal faster, thereby reducing how much interest you pay.
  • A low mortgage rate—By getting the best mortgage rate, you’ll pay a lower amount of interest on your mortgage. This can be seen in a simple interest calculation. Assume you’re buying a $ 500,000 property and making a 20% down payment. You’re thinking about getting a five-year fixed-rate mortgage at TD Canada Trust (currently 2.59%). But then you check and find you can possibly get a rate of 2.28% (as of the time of writing). If your mortgage rate is 2.59%, you’ll pay $ 47,754 in interest in the first five years. But if your rate is 2.28%, you’ll pay $ 41,940 in interest over five years. That’s a savings of $ 5,814.

The bottom line

With a mortgage payment calculator, you can estimate more than just what your mortgage payment will be. Mortgage calculators can also help you determine your land transfer taxes, how much mortgage insurance costs will be (if needed), and what your estimated monthly expenses will be.

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