Buying a home is the biggest investment many of us will make. This calculator will help you estimate the Maximum Purchase Price and Maximum Monthly Housing Cost you can afford.
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The down payment is the portion of a home’s purchase price you come up with. In order to be approved for a mortgage, you will need at least 5% of the purchase price as a down payment. If your down payment is more than 5% but less than 20% of the purchase price your mortgage will have to be insured against default and a default insurance premium will apply. This premium can be paid separately or added to your mortgage. If it is added to your mortgage it will increase your monthly mortgage payment.
You should determine how large a down payment you can afford before you start house-hunting.
This is the number of years (amortization period) you expect to pay off the amount you have borrowed to purchase your home. Many homeowners start with an amortization of 25 – 30 years.
The longer you take to pay off your mortgage, the more you’ll pay in interest costs. For example if you borrow $100,000 at a rate of 4% with a 60 month interest term and a 25 year amortization, you will pay $57,803.99 in interest over the life of the mortgage. If you borrow the same amount, for the same term and interest rate over 30 years, you will pay $85,132.58 in interest.
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