Ontario Mortgage Calculator 2018

Calculate your Ontario mortgage payments for 2018 using this professional mortgage calculator. Understand how interest rates, amortization periods, and down payments affect your monthly payments and total interest costs.

How to Use This Calculator

Enter your mortgage details into the calculator on the right side of the page. The calculator will show you:

Your monthly mortgage payment
Total interest paid over the loan term
Total amount paid (principal + interest)
A breakdown of how your payments are allocated

You can adjust any of the inputs and click "Calculate" to see how changes affect your mortgage payments. The calculator uses the standard mortgage payment formula and assumes a fixed interest rate throughout the loan term.

Mortgage Payment Formula

The calculator uses the standard mortgage payment formula:

Mortgage Payment Formula

M = P [i(1 + i)ⁿ] / [(1 + i)ⁿ - 1]

Where:

M = Monthly payment
P = Principal loan amount
i = Monthly interest rate (annual rate divided by 12)
n = Number of payments (loan term in years × 12)

This formula calculates the fixed monthly payment required to pay off a loan with a fixed interest rate over a specific period.

Example Calculation

Let's calculate a mortgage payment for a $300,000 loan with a 3.5% annual interest rate and a 25-year amortization period.

Example Inputs

Principal: $300,000
Annual Interest Rate: 3.5%
Amortization Period: 25 years

The calculation would be:

Calculation Steps

Monthly interest rate = 3.5% ÷ 12 = 0.0029167

Number of payments = 25 × 12 = 300

Monthly payment = $300,000 [0.0029167(1 + 0.0029167)³⁰⁰] / [(1 + 0.0029167)³⁰⁰ - 1]

Monthly payment ≈ $1,723.56

This means you would pay approximately $1,723.56 per month for 25 years, with a total interest payment of about $225,000.

Interest Rates in Ontario

Interest rates in Ontario for 2018 varied depending on the type of mortgage and your credit profile. Typical fixed rates ranged from 2.5% to 4.5%, while variable rates were often slightly lower but more volatile.

The calculator assumes a fixed interest rate, which means your monthly payment remains the same throughout the loan term. Variable rates, on the other hand, can change over time based on market conditions.

Understanding Amortization

Amortization is the process of paying off a loan over time. With a mortgage, amortization means gradually paying down the principal balance while also paying interest on the remaining balance.

The amortization period is the length of time it takes to pay off the loan. Common amortization periods in Ontario are 25, 30, or 35 years. A longer amortization period means lower monthly payments but more total interest paid over the life of the loan.

Amortization Period	Monthly Payment (for $300,000 at 3.5%)	Total Interest Paid
25 years	$1,723.56	$225,000
30 years	$1,500.00	$270,000
35 years	$1,350.00	$315,000

Frequently Asked Questions

What is the difference between fixed and variable interest rates?

A fixed interest rate remains the same throughout the loan term, while a variable rate can change based on market conditions. Fixed rates typically offer more stability in monthly payments but may be slightly higher than variable rates.

How does a down payment affect my mortgage?

A larger down payment reduces the principal amount you need to borrow, which can lower your monthly payments and total interest costs. However, it also means you have less equity in your home initially.

What is the difference between principal and interest payments?

Principal payments reduce the amount you owe on the loan, while interest payments cover the cost of borrowing the money. Over time, principal payments increase while interest payments decrease as the loan balance decreases.

Can I pay off my mortgage early without penalties?

Some mortgages allow prepayment without penalties, while others may charge prepayment fees. It's important to check your mortgage agreement or speak with your lender about any prepayment terms.

How do I calculate the total cost of my mortgage?

The total cost of your mortgage is the sum of all your monthly payments multiplied by the number of payments. This includes both the principal and interest portions of each payment.