Securing a mortgage is a significant step towards homeownership. TD Canada Trust offers various mortgage solutions, and understanding how much you can afford and what your monthly payments might look like is crucial. This calculator helps you estimate your potential monthly mortgage payment (Principal and Interest) based on key factors.
How the TD Mortgage Affordability Calculator Works
This calculator uses the standard formula for calculating the monthly payment of a fixed-rate mortgage. The formula is derived from the present value of an annuity formula:
M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]
Where:
M = Your total monthly mortgage payment (Principal and Interest)
P = The principal loan amount (Target Home Price – Down Payment)
i = Your monthly interest rate (Annual Interest Rate / 12 / 100)
n = The total number of payments over the loan's lifetime (Loan Term in Years * 12)
Breakdown of Inputs:
Target Home Price: The maximum price you are considering for your new home.
Down Payment: The amount of cash you plan to pay upfront. A larger down payment reduces the principal loan amount, thus lowering your monthly payments and potentially improving your mortgage terms.
Estimated Annual Interest Rate: This is the annual interest rate offered by the lender. It's crucial to get pre-approved to understand the rates you qualify for. Rates can significantly impact your monthly payments.
Loan Term (Years): The duration over which you will repay the mortgage. Common terms are 15, 20, 25, or 30 years. A longer term means lower monthly payments but more interest paid over the life of the loan. A shorter term means higher monthly payments but less total interest.
Why This Calculation Matters for TD Mortgages:
When you approach TD for a mortgage, they will assess your financial situation to determine your borrowing capacity. Factors like your income, debts, credit score, and the down payment you offer all play a role. This calculator provides a preliminary estimate of the Principal and Interest (P&I) portion of your mortgage payment. Remember that your actual total monthly housing cost will likely include other expenses such as:
Property Taxes
Homeowner's Insurance
Potentially Mortgage Default Insurance (e.g., CMHC insurance if your down payment is less than 20%)
Condo Fees (if applicable)
Important Considerations:
Pre-approval: Before seriously house hunting, get pre-approved by TD. This gives you a clear budget and strengthens your offer when you find a property. This calculator is an estimate and not a loan offer.
Variable vs. Fixed Rates: This calculator assumes a fixed interest rate. TD also offers variable-rate mortgages, where the interest rate fluctuates based on market conditions, affecting your payment amount (though often payments are recalculated based on a fixed amortization schedule). Consult with a TD mortgage specialist for details on both.
Closing Costs: Factor in closing costs, which can include legal fees, land transfer taxes, appraisals, and more.
Affordability Ratios: Lenders like TD typically assess affordability using Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. This calculator helps you understand the P&I component, which is a major part of your GDS.
Use this tool as a starting point to understand your potential mortgage payments and discuss your options confidently with a TD mortgage advisor.
function calculateMortgage() {
var homePrice = parseFloat(document.getElementById("homePrice").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanTerm = parseInt(document.getElementById("loanTerm").value);
var monthlyPaymentElement = document.getElementById("monthlyPayment");
if (isNaN(homePrice) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) {
monthlyPaymentElement.textContent = "Invalid input";
return;
}
if (homePrice <= 0 || downPayment < 0 || interestRate <= 0 || loanTerm homePrice) {
monthlyPaymentElement.textContent = "Down payment cannot exceed home price";
return;
}
var principal = homePrice – downPayment;
var monthlyInterestRate = (interestRate / 100) / 12;
var numberOfPayments = loanTerm * 12;
var monthlyPayment = 0;
if (monthlyInterestRate > 0) {
monthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, numberOfPayments)) / (Math.pow(1 + monthlyInterestRate, numberOfPayments) – 1);
} else { // Handle 0% interest rate case, though unlikely for a mortgage
monthlyPayment = principal / numberOfPayments;
}
monthlyPaymentElement.textContent = "$" + monthlyPayment.toFixed(2);
}
// Optional: Update slider value display if using range inputs
var interestRateSlider = document.getElementById("interestRate");
var sliderValueDisplay = interestRateSlider ? interestRateSlider.nextElementSibling : null;
if (interestRateSlider && sliderValueDisplay && sliderValueDisplay.classList.contains('slider-value')) {
interestRateSlider.oninput = function() {
sliderValueDisplay.textContent = this.value + "%";
}
// Initialize display on load
sliderValueDisplay.textContent = interestRateSlider.value + "%";
}