Worked examples
See how mortgage decisions change the numbers
These consistent, illustrative scenarios show payment, interest, principal, closing-cost, renewal, and private-mortgage tradeoffs.
A 0.50 percentage-point rate difference on a $500,000 mortgage
Both mortgages use a 25-year amortization and monthly payments. Mortgage A is 4.50%; Mortgage B is 4.00%.
- Monthly payment at 4.50%
- $2,767
- Monthly payment at 4.00%
- $2,630
- Monthly payment difference
- $137
- Five-year interest difference
- $11,948
- Five-year balance difference
- $3,712
What it showsThe rate changes both cash flow and how much principal remains. Comparing only the scheduled payment misses part of the cost.
Change the payment assumptionsA 25-year versus 30-year amortization
The mortgage is $500,000 at 4.50% with monthly payments. Only the amortization changes.
- 25-year monthly payment
- $2,767
- 30-year monthly payment
- $2,521
- Monthly payment reduction
- $246
- Additional lifetime interest
- $77,379
- Additional balance after 5 years
- $16,520
What it showsThe longer amortization lowers the required payment but increases interest and slows principal repayment when everything else is equal.
Review amortization eligibility and tradeoffsAn $800,000 first home outside Toronto
The example uses an $80,000 down payment, full Ontario first-time buyer refund eligibility, and $6,700 of editable service, adjustment, inspection, appraisal, and moving estimates.
- Ontario land transfer tax before refund
- $12,475
- Ontario first-time buyer refund
- −$4,000
- Mortgage-insurance premium added to mortgage
- $22,320
- Ontario tax on the insurance premium
- $1,786
- Estimated closing costs
- $16,961
What it showsThe mortgage-insurance premium may be added to the mortgage, but Ontario's tax on that premium is normally paid in cash at closing.
Build a complete cash-to-close estimateThe same $800,000 first home in Toronto
The assumptions are the same, with Toronto municipal land transfer tax, the full eligible first-time buyer rebate, and the MLTT administration fee added.
- Toronto municipal land transfer tax
- $12,475
- Toronto first-time buyer rebate
- −$4,475
- Ontario and Toronto net land transfer tax
- $16,475
- Estimated closing costs
- $25,076
- Increase compared with outside Toronto
- $8,116
What it showsToronto's municipal tax is separate from Ontario land transfer tax. Eligibility for one program should not be assumed from another program's definition.
Check the land transfer tax calculationA renewal offer at 4.65% versus 4.25%
A $450,000 balance has 20 years remaining. Both options use monthly payments and a three-year comparison period; the alternate lender has $1,200 of switching costs.
- Renewal-offer monthly payment
- $2,873
- Alternate monthly payment
- $2,778
- Interest under the renewal offer
- $59,281
- Alternate interest plus switching costs
- $55,316
- Estimated three-year net saving
- $3,965
What it showsA lower rate can still be a weak switch if fees, privileges, restrictions, or a different amortization erase the benefit.
Compare a renewal offerA one-year interest-only private mortgage
The principal is $500,000 at 9.00%. Lender and brokerage fees total 3%, and legal, appraisal, and other costs total $3,000.
- Monthly interest-only payment
- $3,750
- Interest for the 12-month term
- $45,000
- Fees and entered costs
- $18,000
- Net funds if costs are deducted
- $482,000
- Total one-year borrowing cost
- $63,000
What it showsThe stated interest rate is only one part of the cost. The maturity balance and a realistic exit plan matter as much as the initial advance.
Calculate private-mortgage costs