If you’re in the market for a home, you’re probably wondering how much your mortgage payments will be. If you’re thinking about getting a mortgage from CIBC, you can use Ratehub.ca’s CIBC mortgage payment calculator to estimate your payments.
To use the calculator, you’ll need to know the asking price of your home, your down payment, the amortization period, payment frequency, and mortgage rate.
Mortgage payment calculators now offer you the ability to estimate other expenses such as land transfer tax, home inspection fees, and legal fees. They can also help you budget your monthly expenses by helping you calculate total expenses. Additionally, once you’ve calculated your monthly mortgage payment, you’re provided with an amortization schedule.
An amortization schedule shows you the decrease in principal owing after payments and shows you how much of your payment goes towards principal and interest. These schedules serve as a great resource to determine which mortgage rate, amortization period, and frequency to choose. It’ll also show you the result of altering these factors on total interest paid. Ideally you’ll want to select the mortgage that results in the lowest total interest.
When analyzing your amortization schedule, you’ll notice that a larger percentage of your early payments will go to paying off interest with only a small portion being used to pay off the principal. As time continues and you approach the maturity of your mortgage, the reverse happens: A larger portion of your payment goes to paying off the principal of the loan with a smaller portion being used to pay off interest.
One thing to keep in mind is that your amortization schedule is only an estimate as it assumes the rate you locked in for your mortgage term is the rate you’ll receive for the whole amortization period. However, you’ll have to renew your mortgage once your term is done. When you renew your mortgage, you’re not guaranteed the rate you previously locked in. Therefore, your amortization schedule serves as a guideline and not a guaranteed timeline.
Amortization schedules also don’t always take into account lump-sum payments or prepayments. By making lump-sum payments, you’re able to decrease your loan value and pay off your mortgage faster, reducing your total interest paid.
Getting the lowest rate
CIBC’s mortgage rates are similar to its large competitors. However, these posted rates are a lot higher than the best mortgage rates on the market. It’s important to compare mortgage rates from several providers as this will allow you to get the lowest rate. One way to compare multiple rates is by using a mortgage broker. A mortgage broker will negotiate on your behalf with lenders to get you the lowest rate. By using a mortgage broker, you’ll also have access to numerous lenders and products. Since mortgage broker services are free, this is the best way to receive the lowest mortgage rate on the market.
The bottom line
Take advantage of resources like an amortization schedule to find the best mortgage option for you. And consider enlisting the help of a mortgage broker to do your rate comparison shopping and secure you the best mortgage rate.
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Flickr: Jason Baker