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.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).