Here is a handy little table that I found in the book “Personal Finance for Canadians for Dummies” for calculating monthly mortgage payments using a simple multiplier.
|Interest Rate||15-Year Amortization||25-Year Amortization|
How does the table work? You find the current going interest rate, then multiply your (mortgage balance/1000) by the multiplier indicated.
For example, at todays 5 year fixed rates of around 5%, a 25-year $200k mortgage would mean a monthly mortgage payment of approximately $200k/1000 x 5.82 = $1164/month. This is the mortgage payment only and does NOT include property/water tax, insurance and heat/light.
By looking at the chart, another useful rule of thumb is that for every 0.5% that your interest rate goes up or down, you’re going to increase/decrease your monthly payment by around $30/month.
Or, you can simply use an online calculator like the one at Dinky Town.
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