How Much Will a $500,000 Mortgage Cost You

So you’re wondering how much a $500k mortgage is in Canada. Well, you’ve come to the right place. We break this down below, so read on and find out.?

Key Takeaways

• Monthly payments on a $500,000 mortgage will vary depending on the interest rate and the amortization.
• The total interest paid over the life of a $500,000 mortgage can be substantial and influenced by the interest rates over the life of the mortgage and the amortization.
• A longer amortization will mean you will pay more in interest over the life of your mortgage.

Monthly Payments for a $500K Mortgage in Canada

Monthly payments on a $500,000 mortgage will depend on several factors, including your interest rate and the amortization.?

A mortgage calculator like nesto’s can help you estimate payments based on these variables. Typically, your mortgage payment will comprise the principal amount and interest.?

If you put down less than 20% as a down payment, your mortgage will include mortgage default insurance unless paid with cash, which is not added to your mortgage.?

By paying for your mortgage insurance with cash, you can take advantage of the lower insured mortgage rates without amortizing it over the duration of your mortgage. Additionally, you have the option with most lenders to include property taxes as part of your mortgage payment, which will be collected and remitted on your behalf.?

• For example, using nesto’s current 5-year fixed rate of 5.54%, your monthly payment on a 500K mortgage with a 25-year amortization would total around $3,064, while a 30-year amortization would be approximately $2,832. This lower amount is due to the principal being spread out over an extra 5 years, but keep in mind that you will pay more in interest-carrying costs the longer your amortization.

Note: Your payment may differ depending on your mortgage term, amortization, and payment frequency selected when you obtain your mortgage.?

Here’s what monthly payments may look like for you based on a few different interest rate scenarios (rounded to the nearest dollar):

Final Thoughts

Understanding the full impact of a $500,000 mortgage, not only what you expect as monthly costs but also how much interest you will pay over the life of the loan, can help you realize the full implications and costs of taking on a mortgage.??

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?? Ready to secure your mortgage? Contact nesto’s mortgage experts today for the best rates.?

This article first appeared on the nesto blog: https://www.nesto.ca/mortgage-basics/500000-mortgage/