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| Payment comparison over various amortization periods* |
|
Amortization Period
|
Monthly Payment
|
Total Payments
|
Total Interest Paid
|
Interest Savings**
|
|
25 years
|
$895
|
$268,500
|
$168,500
|
n/a
|
|
20 years
|
$952
|
$228,480
|
$128,480
|
$40,020
|
|
15 years
|
$1,063
|
$191,340
|
$91,340
|
$77,160
|
|
10 years
|
$1,311
|
$157,320
|
$57,240
|
$111,260
|
|
* Rounded numbers, for illustrative purposes only
** Assumes a constant interest rate for the entire amortization period.
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| Monthly Payment per $1,000 borrowed* |
|
Interest Rate%
|
Cost per $1,000
|
Interest rate%
|
Cost per $1,000
|
Interest Rate%
|
Cost per $1,000
|
|
6.0
|
$6.40
|
8.5
|
$7.95
|
11.0
|
$9.63
|
|
6.5
|
$6.70
|
9.0
|
$8.28
|
11.5
|
$9.98
|
|
7.0
|
$7.01
|
9.5
|
$8.62
|
12.0
|
$10.32
|
|
7.5
|
$7.32
|
10.0
|
$8.95
|
12.5
|
$10.68
|
|
8.0
|
$7.64
|
10.5
|
$9.29
|
13.0
|
$11.03
|
* Amortized over 25 years based on 10% down payment
Example: Judy can afford $800 per month for a mortgage payment. If the prevailing mortgage interest rate is 6%, she will qualify for a mortgage of $125,000, amortized over 25 years. If the prevailing mortgage rate is 13%, she will qualify for a mortgage of $72,600. The lower the interest rate, the higher the mortgage for which she qualifies. |
source:
"Homebuying Step By Step - A Consumer Guide and Workbook"
published by the Canada Mortgage and Housing Corporation
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