Buying a house is a stressful experience. Not only is it one of the biggest life changes you will ever make, it is likely to be the most expensive purchase you have made so far. Whether you are buying for the first time or moving up in the world – or perhaps moving from elsewhere to Vancouver for work or other purposes – there is a lot you need to think about when you are making such a decision.
The financial side of things is equally stressful. If you’re reading this the likelihood is you are considering taking out a mortgage to buy your Vancouver home. But there is so much jargon involved in the world of finance that it’s difficult to cut through it and get to the base fact you want to know: how much is a mortgage going to cost me? In this brief article we look at what you need to think about and why using a mortgage calculator can be a sensible idea.
What is a Mortgage Calculator?
A quick reminder about mortgages: a mortgage is a loan taken out from a lender to purchase a house (or other buildings, commercial or retail for example). The mortgage will be repaid at a set monthly amount for the duration of the loan, which is usually around 20 to 25 years. During that period, the mortgage company effectively owns the property. Should you fail to keep up with repayments and fall behind, the mortgage company may repossess your property to recoup its outlay.
The problem with understanding a mortgage is that you will pay interest on the loan. The lender will, of course, want some recompense from lending you the purchase price (or a percentage of it, as buyers need to put up a deposit as a show of intent). How is this repayment fee calculated? It’s complex to those of us who do not understand the mathematics behind it, and involves either a fixed or moving interest rate that determines how much you repay.
For a simple idea of what you will need to pay for a property you are considering here is a mortgage calculator Vancouver BC residents and others can use. You will need the purchase price, the amount of the deposit and further information relating to the property. While this gives you a fairly accurate idea it is worth bearing in mind that different lenders may offer you different terms, so you should talk to a few to get the best deal.
What Do You Need to Consider?
The Canadian housing market has suffered in the last year and a half along with the rest of the world. The covid-19 pandemic brought everything to a shuddering halt and for a while lenders withdrew their products from the market. However, things are looking up for buyers and sellers in the Vancouver region.
Before committing to buying a house, you need to consider the following:
-
- How much can you afford as a deposit? More is better.
-
- How much can you afford to repay each month?
-
- What duration of mortgage do you want to commit to?
-
- Who is offering the best rates?
-
- Is a fixed rate or moveable rate a better option?
These are things you should talk to an expert about and we strongly advise you take advice on buying a home in Canada from real estate experts as well as mortgage providers. Once you’re happy with your deal and understand clearly how much you will need to repay per month you are ready to go and buy your dream Vancouver home.
