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Loan Information

Canada Mortgage Rate
(compound semi-annual)
US Mortgage Rate
(compound monthly)

Loan Amount ($)

Annual interest rate (1-30%)

Mortgage Amortization (years)

Mortgage Term (years)
Based on the assumptions you have input:

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Your estimated monthly payments are $0, including Private Mortgage Insurance and you will pay $0 in interest over the life of the loan.

(Notice: the payments are rounded to the nearest dollar amount)

Year Beginning Balance Payment Principal Interest Cumulative Principal Cumulative Interest Ending Balance
Step 1 - Income

Combined monthly household income

Target House Value
Step 2 - Debt Obligations

Monthly auto payments

Monthly credit card payments

Current utilities expenses

Any Other Expenses
Step 3 - New Loan Assumptions

Canada Mortgage Rate
(compound semi-annual)

US Mortgage Rate
(compound monthly)

Annual interest rate on new mortgage

Term of new mortgage:(years)

Funds available for a down payment

GDS (Gross Debt Service Ratio):
Monthly gross income $0
Gross Debt Service Ratio 0%
Calculated payment for GDS $0

TDS (Total Debt Service Ratio):
Debts and obligations $0
Percent of gross income 0%
Maximum percentage available for mortgage payment 0%
Calculated payment for TDS $0

Payment Calculation
Maximum allowed payment $0
Calculated mortgage amount $0
Down payment $0

Home value you can afford $0
Step 1

Legal Fees

Legal Disbursements

Lawyer's Fee

Land Transfer Tax*

*Not applicable in all provinces and territories.

Total Closing Cost:
Step 2

Appraisal Fee

Home Inspection

Mortgage Broker's Fee

Prepaid Property Taxes

Total Closing Cost:
Step 3

Utility Bill Adjustments

Property Insurance

Survey or Certificate of Location Cost

Title Insurance

Misc Fees

Total Closing Cost:
Legal fees such as mortgage registration, title transfer, tax certificates, land titles searches.
This includes disbursements such as couriers, photocopying, and faxing.
Fees charged by the lawyer who prepares and reviews the purchase documents.
Provinicial or municiple tax payed when purchasing the home. It is also commonly called Land Registration Fee, Deed Registration Fee, Tariff or Property Purchase Fee. It is between 0.5% and 2.0% of the purchase price, depending on your province.
Charged by a licensed appraiser. Many mortgage lenders require that the home be appraised at the buyer's expense. This usually costs between $250 and $500.
Charge to have the home inspected by a professional. A home inspection report usually costs between $250 and $500.
A fee charged by the mortgage lender for preparing and evaluating the loan. Sometimes called the Loan Origination Fee. Usually less than 1% of the loan amount.
Property taxes prepaid by the seller that you will have to reimburse.
Utility costs prepaid by the seller that you will have to reimburse.
Required by the mortgage lender to cover the loss of the house and its contents. Generally between $250 and $650
Payment for an up-to-date survey or certificate of the land, should the seller not have one available. It is used to determine if trees, plants and fences are on the property. Typically costs between $350 and $2000
Insurance protecting the ownership rights to the property. Sometimes purchased in lieu of a land survey. Typically around $200.
Miscellaneous Fees
Mortgage Information

Length of Mortgage (years):

Interest Rate (%):

Down Payment:

Estimated Closing Costs:
House Information

Listed Price:

Negotiated Price:

Annual Appreciation:

Annual Property Tax:

Annual Maintenance Costs:

Annual Insurance:
Renting Information

Monthly Rent :

Annual Rate of Increase (%):

Damage Deposit:
Other Information

Annual Return on Investment (%):

Selling Cost (%):

Years Before Selling:

Buying Results

Your Monthly Loan Payments Will Be:
Gained Equity From Appreciation:
Closing Costs:
Selling Expense:
Total Propery Tax:
Total Maintenance:
Homeowner's Insurance:

Net Gain:

Renting Results

Your Expected Rent Payment:
Your Total Cost of Buying:
Your Total Cost of Renting:
Savings With Interest:

Net Gain:

Net Gain from Buying Net Gain from Renting
The length of your mortgage.
The Canadian nominal interest rate for your mortgage
Your down payment on the property
The total estimated closing costs NOT including your down payment
The listed price of the property
The final purchase price of the property
The expected annual increase in the value of the property expressed as a percentage
The total property tax payed on the property annually
The total cost of maintaining the property (not including Tax or Insurance) for the period of one year
The cost to insure the property to the period of one year
Your monthly rent payment
The expected yearly rate of increase for your rent as a percentage
Your initial damage deposit
The expected rate of return on savings invested during the time period
The estimated cost to sell the propery expressed as a percentage of home value
How long will you keep the property
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Mortgage Insurance Premium

This is an insurance premium on the mortgage for the bank of finance Company's benefit not the Buyer's. Mortgages in Canada with less than a 25% equity position by the Purchaser must be insured. Canada Mortgage & Housing Corp. and GMHC are insurer corporations. CMHC loan insurance is portable (on mortgages placed since April 1997) to all areas of Canada under certain terms and conditions. The following is a table of fees relative to the percentage equity, the greater the down payment the less the fees are. Fees are added to the mortgage amount, they do not increase the down payment.



Premium - Single Advance: Payable to CMHC at the time the loan is advanced.

Premium -More Than One Advance: Due and payable to CMHC as the mortgage funds are advanced. The mortgage loan insurance premium may be added to the amount of the loan. Where provincial sales tax is payable on the CMHC mortgage loan insurance premium, the amount of the tax is not to be added to the mortgage amount.


Mortgage Qualification

Select one of the following to learn more about mortgage qualification:

Pre-Qualification The first step

Actual Qualification Usually after you have found your new home

The Lender's Criteria The ground rules

Mortgage Pre-Qualification

A visit to your lender is a smart step to get started with even before you go out to look at homes. Be sure to organize beforehand to make your time more effective. Do some brainstorming and write down any questions that you may have before your meeting. Your loan officer can be a great source of information. One thing you must be aware of though is that this is just what it says it is and no more. It is a "PRE"-approval. The financial institution will only "crunch" the numbers with you at this time and review the actual approval process. The bank usually will not check references or credit ratings until you actually have found your new home and have a signed Offer to Purchase. But pre-qualifying will help to set the boundaries for budgeting for your new home.

Keep in mind that the bank will often lend more money than you are comfortable borrowing. Your true maximum mortgage amount oftentimes is lower than what the lender will offer. Your personal mortgage payment limit needs to be a payment that you will feel comfortable making and still be able to enjoy your lifestyle and meet your other goals.

Request a letter stating what you qualify for. It can be a valuable tool later when making an offer on a property.


Actual Qualification

Once you have an accepted Offer to Purchase contract made on the home you want to buy the following is a list of what you will need for the actual application. The "PRE" qualifying process is only preliminary; once you have found your new home the process becomes more detailed. For the actual qualifying process you will need to work with your lender to complete the application procedure. You will need a letter confirming your employment. This should include your position, number of years with that employer, your prospects for the future with the company and your current salary, wage or anticipated earnings. Photocopies of your T-4 slips for the past few years are also helpful.

Make a list of your assets (cars-even if you owe money on them-stocks, savings accounts, bonds, etc.); include their present estimated value (and location, where appropriate); add up the total dollar amount of assets held.

Make another list of your liabilities (car loans, student loans, credit card balances, etc.); include the current balance owed, name of the party to whom you owe money and account numbers; add up the total dollar amount of liabilities. Subtract your total liabilities from your total assets to determine your net worth. Itemize the source(s) of your down payment, giving account numbers where appropriate. The lender will need to verify that you have these funds before granting the mortgage. If you borrow a portion of the down payment from family or friends, the lender will want to know how you intend to pay back the loan. If there's a payment involved, it may be used in calculating your debt-service ratio and if it has to be paid back it may even eliminate your chances for a mortgage depending on your equity situation. If you purchase with the minimum 5% down payment the funds must be unencumbered (not repayable).

Come with your social insurance number, chequing account information and contact information for your lawyer. Your co-applicant should bring similar information and be present when you visit the lender to fill out the application. Bring a copy of the listing details of the home you want to buy and a copy of a current survey or Real Property Report, if available. If you have a completed Offer to Purchase, bring it too.

Be sure to tell the bank who your lawyer will be. You want a lawyer looking out for your interests first not the banks. Your lawyer will register their mortgage and be sure title is in order for the bank. You need to tell them so you don't end up paying for two lawyers.

After you are approved personally, the lender will need to verify the value of the house, and will usually need to have it appraised. The appraised value is an independent expert's estimate of the market value of the house. This will hopefully be close to the price you've agreed to pay, but it may not necessarily be the same. When calculating the maximum size of a mortgage the lenders will issue against a property, it will be based on the appraised value or the selling price, whichever is less.

 How Your Lender Will Qualify You

(you may also refer to the Mortgage Calculator)

When lenders qualify you for a mortgage amount they use two ratios that are relative to your income. These ratios are the G.D.S. (Gross Debt Service Ratio) and the T.D.S. (Total Debt Service Ratio). The G.D.S. is 32% of your combined gross pay before any deductions and the T.D.S. is 42% but with the T.D.S. all non-typical outstanding debt payments are subtracted after the 42% is calculated. The final qualifying mortgage payment has two other expenses subtracted from it. These are an estimate of the monthly property taxes for your new home as well as less a heating allowance of $60 to $120 depending on the size of home you plan on purchasing and the guidelines of the lender you are using.

This is how it would work:

Assuming a gross income of $5,000 per month before deductions.


G.D.S. 32%          T.D.S. 42%

$5,000 X 32% = $1,600   $5,000 X 42% = $2,100

Less Property Tax Est.:   $120       Less Property Tax Est.:   $120

Less Heating Allowance: $80         Less Heating Allowance: $80

Qualifying Payment:       $ 1,400/Month  Less Charge Payments:  $100

Less Car Payment Etc.:   $350

Qualifying Payment:       $ 1,450/Month


In this case the G.D.S. is the lower qualifying ratio so the maximum payment that the lender would allow would be $1,400 per month towards your mortgage.


From this point interest rates and the amortization period of the loan are the final variables. The amortization is the number of years that it would take to pay the mortgage out completely if the interest rate remained fixed. The term of the mortgage is the length of time the mortgage terms (interest rate etc.) remain fixed.


The following chart shows the mortgage principle amounts that the $1,400 per month would yield based on various interest rates and amortization periods. Interest on mortgages in Canada are calculated based on interest compounding semi-annually. With straight interest calculations, payments will be a bit higher and/or the amount of mortgage that you qualify for will be lower. This payment schedule does not take mortgage insurance fees into account (see Costs of Purchasing a New Home).


Amortization Period


Interest   25 Years               20 Years               15 Years               10 Years


 5.5%     $229,361.00        $204,561.34        $172,082.35       $129,366.81

5.0%      $240,713.21         $213,049.26        $177,637.07        $132,306.47

4.5%      $252,948.22        $222,079.40        $183,517.97        $135,346.8

4.0%      $266,149.47         $231,693.54         $189,691.94       $138,492.23



As you can see the interest rate has a dramatic effect on your purchasing power as well as the length of time it takes you to pay your mortgage off (the amortization period). Over 25 years a one and a half percent difference in the rate works out to over $36,000 in buying power. As far as the length of time to pay your home off; as we calculated, if you had a mortgage of $229,361 over 25 years at 5.5% the payment is $1,400 per month. If you kept the payment the same but reduced the interest rate to 4.0% you would have your mortgage paid of five years and three months sooner. Five years and three months times $1400 is a savings of $88,200 that you wouldn't have to pay the bank.



Renovation Mortgage

What is a Renovation Mortgage?

You might be browsing through the Calgary MLS and think, wow that home is perfect, "if only _____ was different". Or perhaps you are looking at a "handyman special" or a fixer-upper.  There are always homes for sale on the Calgary real estate market that fall into either category. The homes that need a little work are usually priced more competitevely and offer excellent value. The problem for some buyers is being able to afford the home, along with the renovations.

CHMC (Canada Housing Mortgage Corp) has what is called a "Purchase Plus Improvements" Mortgage, which lets you buy your dream home, and be able to fix it up as well.  With a Purchase Plus Improvements Mortgage, you lump your renovation and home purchase price together and pay one single mortgage payment, with as little as 5% down - of the "as improved" value.

For example, if you were to purchase a home for $120,000 and wanted to do $30,000 worth of renovations, CMHC will insure a mortgage based on 95% of the "as improved" value. In other words, with a 5% down payment ($7,500)  CMHC will insure a mortgage of $142,500. The key for this to work is that the renovation cost has to be reflected in the "as improved" value of the house. In this given example, CMHC would have to agree that the house would have a value of at least $150,000 after the $30,000 worth of proposed renovations  had been completed. In other words - your renovations have to increase your homes value by at least as much as they cost you.

The insured loan will be based on either the purchase price plus the actual cost of improvements, or the "as improved" market value - whichever was lower.  Remember, however, that in the case of 90-95% financing is only available if the lending value does not exceed the price ceiling for your area. Price ceiling are either $175,000 or $300,000.


How Does It Work?

When you have decided to write an offer on a Calgary home for sale, be sure to make that offer conditional to being approved for a CMHC "Purchase Plus Improvements" Mortgage. Since the offer will be conditional to the arrangement of this financing, you are not on the hook if CMHC feels that the cost of the proposed renovations are not fully reflected in the "as improved" value.

Your second step is to have a qualified contractor put together a description and a cost estimate for the proposed repairs or renovations. Bring your "contractor's Estimate" along with the "offer to Purchase" to your mortgage specialist. They can submit your application to CMHC on your behalf.

The information in this article was researched from:

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the Calgary Real Estate Board. The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license.