1. What is the Loan Payment Formula?

The loan payment formula calculates the fixed monthly payment required to fully amortize a loan over its term. While designed for Canadian immigrants, it applies to all home loan calculations regardless of immigration status.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( P \) — Principal loan amount (CAD)
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula accounts for both principal repayment and interest charges over the loan term.

3. Importance of Loan Payment Calculation

Details: Accurate payment calculation helps borrowers understand their financial commitments and compare different loan options.

4. Using the Calculator

Tips: Enter principal in CAD, annual interest rate in percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this calculator account for Canadian mortgage rules?
A: The basic calculation is the same, but doesn't include stress test rates or mortgage insurance.

Q2: How accurate is this calculator?
A: It provides the standard mathematical calculation, but actual payments may vary slightly due to rounding or lender-specific policies.

Q3: Does this include property taxes or insurance?
A: No, this calculates principal and interest only. Canadian homeowners must budget separately for taxes and insurance.

Q4: What's a typical Canadian mortgage term?
A: Most Canadian mortgages have 25-30 year amortization periods with 5-year terms.

Q5: Are there special programs for immigrants?
A: Some Canadian lenders offer special programs for newcomers with limited credit history.