Use approvU easy-to-use mortgage refinance calculator to determine if you’re ready to refinance your mortgage as well as the monthly payments.
The approvU online mortgage refinance calculator will help you figure out just how much you would save per month and in total with a different loan term. Experience how easy it is to estimate what your monthly payment is using the below refinance calculator.
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Refinancing your mortgage means ending your current mortgage and replacing it with a new contract on better terms to help you achieve your financial goals. You may remain with your existing mortgage lender or switch to a new one.
This calculator helps you understand how much you should expect to pay each month refinancing at a new loan amount, mortgage rate, term, and amortization. It also shows how much interest you will spend over the mortgage term and how much you will pay down the mortgage loan at the end of the selected term.
The detailed output is what you need to make the right mortgage financing decision.
Simply fill out the mortgage loan, rate, term, period, and payment frequency fields to use the calculator. The calculator will automatically generate what your payment will be for your specific frequency.
This is the amount you want to borrow to finance your house purchase. Ensure that your requested loan amount is enough to pay off your existing mortgage loan.
Also, if you are looking to consolidate some of your high-interest debt or cash out some money from the refinance, ensure to include the amounts for these transactions in your requested mortgage loan.
Your mortgage loan should be made up of all these
The length of repayment is how long you want to pay off the mortgage entirely. It is often referred to as the amortization period. The most common length of mortgage repayment in Canada is 25 years.
This is the maximum length for high-ratio mortgages. This implies that it will take 25 years to pay off your mortgage loan if you make regular monthly, weekly, or bi-weekly mortgage payments.
You have the option to increase your amortization period to 30 years with a mortgage refinance transaction.
Note that the shorter the repayment length, the higher the monthly payment amount, the lower your interest expense, and the faster it will take to pay off your mortgage.
On the other hand, the longer the repayment length, the lower your monthly mortgage payment amount, the higher the interest paid for the mortgage loan, and the slower it will take to pay off your mortgage loan.
Payment frequency is how often you want to make your mortgage payment. The standard payment frequencies are monthly, weekly, bi-weekly and semi-monthly.
The mortgage term is how long you want to stay committed to the mortgage rate with a specific lender. Standard mortgage terms in Canada range from 6 months to 10 years.
You may choose to fix your mortgage rate for this entire period or have it susceptible to change.
The term you select determines the total amount of interest and principal you will spend over the period chosen. This helps in planning the amount of your mortgage payments.
This is the interest rate charged for the mortgage loan amount. This is the price you are willing to pay for the mortgage or the amount you are ready to compensate the lender for the mortgage. The interest rate is applied to the mortgage loan and paid regularly as part of your mortgage payment.
A mortgage payment is an amount you are required to pay your lender regularly (monthly, semi-monthly, bi-weekly or weekly) for the loan offered to you.
The mortgage payment is made of the principal and interest payment and sometimes may include your property tax payment.
The payment’s interest portion is the fee paid to the lender for offering you the mortgage loan. The principal portion goes to pay down the mortgage loan. And if included, the property tax portion is transmitted to the municipality where you live.
Your mortgage payment is the amount you will pay on a regular interval towards your loan.
The mortgage payment generated above comprises the principal payment, interest payment, and default insurance payment (if applicable).
The principal portion is the part of the mortgage payment that goes towards paying down your mortgage loan. Every time you make a mortgage payment, your outstanding mortgage loan balances are reduced by the portion of your principal part of the mortgage payment.
The percentage of your principal amount increases per payment as you pay down your mortgage.
Interest is the fee of the mortgage loan. The amount you pay is based on your mortgage rate and the loan amount. The money you pay goes directly to your lender. The interest portion reduces as your mortgage loan matures.
This is the total amount paid over your selected mortgage term.
The principal portion is the total amount you have paid towards the mortgage over the mortgage contract term.
The end-of-period mortgage balance is the amount you will still owe the lender at the end of your selected term. You can choose to renew or refinance your mortgage with your existing lender by replacing your current mortgage contract with a new one. Or you may decide to move your mortgage loan to another lender.
Either way, this outstanding mortgage loan balance has to be paid to the existing lender to have your mortgage discharged.
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There are many reasons why it is worth your time to use an affordability calculator when planning to buy a new house.
Mortgage affordability requires an analysis of your current financial and credit situations, as well as your qualification (debt-service) ratios. Trying to do this manually could take you forever.
The approvU mortgage affordability calculator is specifically designed to ease this process and get you the result fast. Simply select and enter the required information in the respective fields to generate your mortgage-affordability report.
Our calculator is easy to use. We keep updating the calculator to provide you with the best user experience. All the values you need to input are clearly labelled with additional helpful tips on what they are.
The simple interface is another reason you don’t have to struggle to figure out your house-buying power with ‘pen and paper’ calculations.
Manual calculations are prone to mistakes. This calculator is configured to weed out the possibility of errors. You are sure to get the correct result if you provide the calculator with the correct values.
With a calculator like this one, you can easily play around with the input values to get the optimal combinations of income type, credit score range, down payment, debt level, and income amount to afford the mortgage for your new home.
Armed with that information, you are sure to start your house-buying journey on a good note.
Mortgage refinance provides you with the opportunity to swap your high-interest mortgage loan for a low-interest mortgage loan. Everything being equal, lowering your mortgage rate will lower your monthly mortgage payment.
Depending on your situation and your goals, you may choose to either increase or reduce your mortgage amortization period by refinancing your mortgage.
Increasing the amortization period, for example, from 25 years to 30 years, will help reduce your monthly payments. Your payment amount is spread over a longer timeframe. However, the longer your amortization period, the more interest expense you will incur.
On the other hand, shortening your amortization, for example, from 25 years to 20 years, will increase your monthly payments. The reduced amortization period means that your mortgage will be paid off much sooner, and it will also realize savings in interest expense.
Depending on the current and expected future interest rates, as well as how long you plan to stay in your home, you may choose to change your loan type.
Suppose you are on a variable-rate mortgage. In that case, you may find that switching to a fixed rate helps you avoid interest-rate fluctuations, giving you a fixed monthly payment for the mortgage duration and allowing you to plan better for the future.
Or, if you expect interest rates to go down in the future, you may choose to switch from a fixed rate to a variable rate.
If your home has increased in value, you may have a significant amount of money trapped in your home.
Cashing out that equity can help you generate the money needed to pay for high-cost items, such as home improvements, your children’s college tuition, or other higher-interest consumer debts.
Refinancing could improve your credit score if you choose to consolidate your other debts. This will reduce the number of active debts you have and possibly reduce your monthly payment amounts.
All these changes will help boost your credit score. children’s college tuition, or other higher-interest consumer debts.
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Expect to spend money on appraisal reports and lawyer fees. You may also be charged a lender and broker fee when you refinance.
Below are the detailed fees you will incur when you refinance your mortgage:
An unbiased appraisal report from a licensed appraiser is key to any mortgage refinance transaction. This report states the market value of your mortgage, offers valuable comparative analysis, and comments on the marketability of your property.
Expect to spend anything between $299 to $700 on an appraisal report.
The inspection fee is what you will pay for an inspection report. Like with an appraiser report, a Licensed Home Inspector inspects your property for any structural issues. Unlike an appraiser report, a home inspection report is often not required.
However, upon review of the appraisal report, the lender may request a Property Inspection Report. Expect to spend anywhere between $200 to $500 for a home inspection report.
Private and alternative mortgage lenders charge origination fees as compensation for processing your mortgage application. The fee goes to cover the underwriting and upfront administration cost for originating the loan.
The lender fee rate ranges from 1% to 5% of the loan amount.
In Canada, you are required to have an insured real estate lawyer represent you in any mortgage transaction. The lawyer fee ranges from $1,200 to $2,500.
Each lender has a maximum limit of how much cash they will allow you to get out of the mortgage refinance transaction. At the moment, the maximum amount for most lenders is $200,000.
This tool will help you learn what house price you can afford and how much your mortgage and mortgage payments will be when you buy a home.
Use this mortgage down payment calculator to estimate how much down payment you need to buy your new home at your current income type and credit score.
The approvU mortgage payment calculator will help you determine your regular mortgage payment amount.