The Greenhouse
by Pine

Using a mortgage calculator to figure out your monthly payments

It’s time to determine what your mortgage payment will be.

Got a some money in the bank and a potential home you want? It's time for a little math.

Purchasing your first home is exciting, but it can also be pretty overwhelming, too. Now that you have some money in the bank, and are looking at a potential home, it’s time to determine what your mortgage payment will be. One of the easiest ways to do that? A mortgage calculator.

What is a mortgage calculator and how do you use it?

A mortgage calculator determines the approximate price of your monthly mortgage payment. With this tool, you can figure out exactly how much you might have to spend on your home before factoring in additional expenses like household utilities, insurance, and other fees.

The best part? It's easy. You plug in the selling price of your home, how much your down payment will be, the term of your loan, your interest rate, and your postal code. 

Before diving in too much about your mortgage calculation, it’s important to first understand each component that makes up your mortgage. 

What is a mortgage? 

A mortgage is a loan from a financial institution, both private and public, that aids you in the process of purchasing a home. When you sign a deal for a mortgage with a broker, the lender pays for the sum of your home upfront, and you agree to pay back a specific amount to the lender, with additional interest, over a set period of time. 

What is a down payment?

A down payment is money that you pay upfront upon closing the deal to your house. This amount is taken off the total price of your house. A down payment represents your official stake in the home, and proves your ability to be able to save a sum of money that can go directly on the purchase of your new home. 

The price of your down payment is completely up to your financial standings. However, the more you put down towards the purchase, the lower your debt obligations and lower monthly payments.

What is a loan term?

The loan term is the length of time you are going to spend paying off the loan for your mortgage. Typically mortgage loans are based on 25-30 year terms, but it all depends on how long you’re looking to pay it off for. A shorter term will allow you to not only pay off your remaining debt quicker, but also pay less interest, and build up equity at a quicker rate. The terms available to you will depend on your financial situation and the type of loan you end up deciding on. 

What is interest?

A typical monthly mortgage payment is broken down into two main sections; Principal, and interest. The principal is the amount you borrow from your lender in order to pay for your home and the interest is how much additionally you have to pay over the course of your loan. 

What is an interest rate?

Interest is an additional fee you pay to the mortgage lender who you are borrowing money from. The interest that you pay is based off of a percentage of the remaining loan. The percentage that is remaining is considered your interest rate. There are several factors that can determine your interest rate including your credit history, down payment amount, outstanding loan amount, and the type of loan package you end up agreeing on. 

Now that you understand what a mortgage is and how each part of it works, it’s time for you to find the perfect home! Purchasing a home is a very exciting milestone in your life, and at Pine we want to be there every step of the way. Connect with one of our advisors to help you on your journey.

Question? We've got answers.

What’s involved in getting a mortgage from Pine?

Does Pine charge any lender fees?

Can I take advantage of the Home Buyer’s Plan with Pine?

Will I have a point of contact at Pine?

Is my data secure with Pine?

How much of a down payment does Pine require?

Can Pine help me if I have poor credit?