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Your mortgage payments over 30 years will add up to $0.

FREQUENTLY ASKED QUESTIONS

WHAT IS A DOWN PAYMENT?

 

The down payment is the initial amount you contribute toward the purchase of a home. While the standard recommendation is 20% of the home’s price, many loan programs allow for lower down payments, sometimes as little as 3.5%. The more you put down upfront, the smaller your loan amount will be, which can lead to lower monthly payments or allow you to qualify for a more expensive home. A larger down payment can also help you avoid additional costs, such as private mortgage insurance (PMI), which is typically required for loans with less than 20% down.

WHAT IS A LOAN TERM?
 
 
The loan term is the length of time to repay your mortgage, typically 30 or 15 years. A 30-year loan has lower monthly payments but higher total interest, while a 15-year loan offers a lower rate and faster payoff with higher payments. The right choice depends on your budget and goals.

WHAT IS A LOAN TYPE?

 

The two main mortgage types are fixed-rate and adjustable-rate loans.
 
• Fixed-Rate Loans: The interest rate stays the same, keeping monthly payments stable.
 
• Adjustable-Rate Mortgages (ARMs): Start with a lower fixed rate for a set period, then adjust annually based on the market. ARMs can be beneficial for short-term buyers but come with potential payment increases.
WHAT IS AN INTEREST RATE?
 
The interest rate determines how much you pay in interest on your mortgage loan. The rate shown in the calculator is an estimate based on current averages, but your actual rate will depend on factors such as your credit score, loan type, down payment, and lender policies. A lower interest rate can significantly reduce the total cost of your loan, making it an important factor when shopping for a mortgage.

WHAT IS A PROPERTY TAX RATE?
 
Property taxes are a recurring cost that homeowners must pay, typically based on the assessed value of their home. These taxes are usually included in your monthly mortgage payment and collected by your lender to be paid annually or semi-annually to the local government. The mortgage calculator provides an estimated tax amount based on the home’s value, but you can adjust this number in the advanced options to reflect your area’s actual tax rate.
WHAT IS HOME INSURANCE?
 
 
The loan term is the length of time to repay your mortgage, typically 30 or 15 years. A 30-year loan has lower monthly payments but higher total interest, while a 15-year loan offers a lower rate and faster payoff with higher payments. The right choice depends on your budget and goals.

WHAT IS CONDO FEE?

 

Homeowners insurance protects your home and belongings from damage or loss due to events like fire, theft, or natural disasters. Most lenders require borrowers to have a home insurance policy as a condition of the loan. The estimated cost is included in the mortgage calculator, but you can adjust it based on actual quotes from insurance providers.

WHAT ARE LAND TRANSFER TAXES?

 
Land Transfer Tax (LTT) is a fee paid to the government when purchasing a property. The amount varies by province and is usually based on a percentage of the property’s purchase price. In some areas, first-time homebuyers may qualify for rebates or exemptions. Ontario, for example, has both provincial and municipal land transfer taxes in cities like Toronto. It’s important to factor LTT into your total closing costs when budgeting for a home purchase.

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Lorri Eckert

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+1(905) 467-0318 | lorrieckert@everyavenue.ca

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