B.C. Mortgage Payment Calculator
Use this free calculator to estimate your monthly mortgage payments in British Columbia, and see how interest rates and amortization lengths affect the total cost of your mortgage.
ALSO CONSIDER: Canada Mortgage Payment Calculator | Alberta Mortgage Payment Calculator | Ontario Mortgage Payment Calculator
Learn how this mortgage calculator works.
How this B.C. mortgage payment calculator works
- “Listing Price” is the dollar value of the home you intend to buy.
- “Payment Frequency” is how often you would like to make your mortgage payments.
- “Down Payment” is how much you can afford to pay upfront for your home. You can use a dollar figure or a percentage of the home’s listing price.
- “Amortization Period” is the total length of your mortgage loan.
- “Rate” is the mortgage interest rate you’ll be charged by your lender. If you’re unsure of what value to enter, check Canada’s current mortgage rates to get an idea.
- “Mortgage Term” is how long you’d like to go before needing to renew your mortgage.
Together these inputs are used to estimate how much a mortgage in B.C. might cost you each month, as well as the entire lifetime of the loan.
Reasons to use this B.C. mortgage calculator
Even if you’re not ready to purchase a home tomorrow, a mortgage payment calculator is a powerful learning tool that can help you:
- Compare how different interest rates affect mortgage costs.
- Understand the positive impact of saving a larger down payment.
- Choose an amortization period and payment frequency that best align with your budget and home ownership goals.
- Decide which mortgage term you’d be most comfortable with.
- Get a sense of how much house you can afford before viewing properties or applying for a mortgage.
Costs included in a mortgage payment
- Principal. The principal is the original amount of money you borrower.If you purchase a $700,000 home and borrow $600,000 from a lender to do so, that $600,000 is your principal.
- Interest. Interest is the amount a lender charges a borrower for providing a loan.Mortgage interest is is compounded, so you pay interest on top of your outstanding interest charges. Interest can be the biggest contributor to the cost of a mortgage.
- Mortgage insurance. Also known as “mortgage default insurance” or “CMHC insurance” is an additional cost paid by homeowners who purchase a home with a down payment smaller than 20%.
- B.C. property taxes. In some cases, borrowers may be able to pay a portion of their annual property tax as part of their monthly mortgage payment.
Mortgage term vs amortization
When you take out a mortgage, you’ll have to choose a mortgage term and an amortization length.
Your mortgage term describes how long your current mortgage arrangement, including your interest rate and payment frequency, lasts. Mortgage terms in Canada typically range from one to 10 years, with most Canadians opting for five-year terms. Once your term expires, you’ll have to renew your mortgage, possibly at a different interest rate and with a different lender.
Amortization is how long it takes you to pay off your mortgage in full. Under Canada’s current lending guidelines, borrowers with down payments of less than 20% cannot choose an amortization period longer than 25 years.
Variable mortgage rates vs. fixed mortgage rates
When securing a mortgage, you’ll have to choose whether your home loan charges a variable or fixed rate of interest.
With a variable-rate mortgage, your interest rate can change over the length of your mortgage term, rising or falling in line with your lender’s prime rate. If you choose a variable-rate mortgage with fixed payments, the monthly payment stays the same whether interest rates increase or decrease, but the amount put toward the principal and interest charges adjusts. If the interest rate rises, for example, more of the payment will go toward covering interest charges.
With a fixed-rate mortgage, your payments will remain the same for the duration of your mortgage term, no matter what happens with interest rates.
Another difference between the two mortgage types is that interest compounds differently in each case. For fixed-rate loans, interest is compounded semi-annually, or twice a year. For variable-rate loans, compounding can occur more frequently. The more often interest compounds, the more you’ll wind up paying.
Payment frequency
Simply put, the more frequently you make your mortgage payments, the faster you’ll pay off your mortgage. Mortgage payment frequencies typically include:
- Monthly (12 payments per year).
- Semi-monthly (two payments per month; 24 payments per year).
- Bi-weekly (one payment every 14 days; 26 payments per year).
- Weekly (one payment every 7 days; 52 payments per year).
Ways to reduce your monthly B.C. mortgage payment
Secure a lower interest rate
Depending on what options are provided by your lender, you may have the option of negotiating a mortgage that charges a lower interest rate.
A mortgage with a 4.5% interest rate might not appear to be significantly cheaper than one that charges 4.65%, but shaving even a few percentage points off an interest rate can save you thousands of dollars over the course of your mortgage.
Make a larger down payment
Saving up and making a larger down payment will reduce the amount of money you need to borrow.
Borrowing less means you can make smaller monthly mortgage payments or try to pay off your mortgage over a shorter amortization period. A smaller loan means paying less in interest overall, but making a larger down payment can also help you secure a lower interest rate from your lender.
Choose a longer amortization period
While choosing a longer amortization will result in a greater number of payments and more interest charges overall, spreading your mortgage out over a longer period will also mean smaller monthly payments.
You might end up paying more for your mortgage than you would with a shorter mortgage term, but the extra breathing room every month can be a game-changer if you’re on a tight budget.
Refinance
If you’ve owned your home for a while, have been keeping on top of your mortgage payments and have good credit overall, refinancing your home loan can also help you reduce your monthly mortgage payment.
When you refinance, you essentially begin a new mortgage. That gives you an opportunity to negotiate a lower interest rate and a new payment schedule, both of which can help lower your monthly obligations.
Additional information for home buyers in B.C.
Getting a mortgage in B.C. shouldn’t be too different from getting a mortgage in any other province. Specific mortgage products and rates may differ somewhat, but the overall process should be the same.
But there are a few unique factors homebuyers in the province should be aware of, including:
- Property transfer tax rebates. The B.C. First-Time Home Buyers’ Program allows qualified first-time buyers in the province to receive a property transfer tax exemption worth up to $8,000, depending on the price of the home being purchased.
- The B.C. Home Owner Grant. This grant allows homeowners an annual reduction in property taxes of up to $770.
- The Newly Built Homes Exception. If you buy a newly constructed home in B.C., you may receive an exemption from the property transfer tax worth up to $13,000.
Frequently asked questions about B.C. mortgage payments
How much your mortgage costs depends on the interest rate offered by your lender and the length of your mortgage. A $1 million mortgage taken out at an interest rate of 4% and paid off over 25 years would cost around $5,260 per month. The same mortgage taken out at 6% would cost almost $6,400. If those mortgages amortized over 20 years, the monthly payments would be $6,042 and $7,121, respectively.
Your monthly mortgage payment will depend heavily on your amortization period and the interest rate offered by your lender. A $700,000 mortgage taken out at an interest rate of 4% and paid off over 25 years would cost approximately $3,682 per month. At 6%, that same loan would cost almost $4,480. If the amortization was shortened to 20 years, the monthly payment on those loans would be $4,229 and $4,985, respectively.
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