How to Use a Mortgage Renewal Calculator to Lower Your Monthly Costs

It can be tricky to figure out your monthly mortgage payments. But at Asim Ali, our mortgage renewal calculator makes it simple. You can try out different interest rates to see which one saves you the most money. This helps you plan your budget and avoid surprises.

Quick Steps for Using Our Mortgage Renewal Payment Calculator

Use the Asim Ali mortgage renewal calculator in Canada to help manage your budget. Here’s a simple guide:

Mortgage Renewal Calculator

Step 1: Enter the Mortgage Amount

This is the amount of money you still owe on your loan. You will have to type the full amount in the box. For example, if you owe $700,000, then type 700000.

Step 2: Enter the Amortization

Amortization means the number of years it will take you to fully pay off the loan. Now, type the number of years in the box. If you plan to pay it off in 25 years, type 25.

Step 3: Enter the Current Variable Rate

In the first rate box, enter the current variable rate. Here, you have to enter it as a percent without the percent sign. For example, if the rate is 4.3%, then you need to type 4.3.

Step 4: Enter the Current Prime Rate

In the second rate box, enter the current prime or fixed rate. Enter it the same way, without the percent sign, like the previous one. For instance, for 4.95%, type 4.95.

Step 5: Look Below Each Box

The monthly payment for each rate will appear below the box. This number will tell you how much you will pay each month with that rate.

What Does Each Field Mean?

Filling in each box helps you see what your new monthly payment will be. Learn the meaning of each field:

Mortgage Amount: It’s the total loan you still owe.
Amortization (Years): The time you have to pay off the loan.
Mortgage Rate: It is the yearly interest rate for the loan.
Monthly Payment: This field shows you the amount you have to pay each month for the loan.

How to Read the Results of Our Free Mortgage Renewal Calculator?

The calculator gives you two monthly payment amounts. Each amount is based on the rate you entered. Follow this guide to understand the results:

Monthly Difference: To find the difference, subtract the smaller monthly payment from the larger one. For example: $4,051.33 – $3,796.86 = $254.47. This means you could save $254.47 each month with the lower rate.
Yearly Difference: Now, multiply the monthly difference by 12. Using the example above, $254.47 × 12 = $3,053.64. So, the prime rate option will cost $3,053.64 more each year.
Total Paid Over the Full Amortization: To find the total, multiply the monthly payment by 12, and then by the number of years in your amortization.

Lower Rate Example: $3,796.86 x 12 x 25 = $1,139,058

Higher Rate Example: $4,051.33 x 12 x 25 = $1,215,399

With the lower rate, you would save $76,341 over the 25 years.

Total Interest Rate: Subtract the mortgage amount from the total paid. For example, the total interest paid on the variable rate is $439,058.00, and the total interest on the prime rate is $515,399.00.