Interested in more house for the same monthly mortgage payment?

The solution is simple, extend your amortization period.

With the recent announcements from both CMHC and Genworth extending amortization periods from 25 years to 30 and 35 years, buyers are now able to get more house for the same monthly mortgage payment.

Here�s how it works.

Amortization Period	25 Years	30 Years	35 Years
Purchase Price	$250,000.00	$270,799.63	$286,825.47
Down Payment @ 5%	$12,500.00	$13,539.98	$14,341.27
Insurance Premium *	2.75%	2.95%	3.15%
Mortgage rate	5.30%	5.30%	5.30%
Mortgage Amount* *	$244,031.00	$264,848.81	$281,067.46
Mortgage Payment	$1,461.26	$1,461.26	$1,461.26

* Mortgage insurance premiums are based on 5% down payment. Additional surcharge of .20% and .40% for 30 year amortization periods and 35 year amortization periods respectively.
** Mortgage and mortgage payment includes costs associated with insurance premium.

In the above examples, you'll notice that we have included amortization periods from 25 to 35 years. You'll also notice that the buyer has a 5% down payment and that the mortgage rate is 5.30%.

Assuming an amortization period of 25 years, a home having a purchase price of $250,000 would have a mortgage of $244,031 and a monthly mortgage payment of $1,461.26.

In the second scenario, the amortization period has been extended to 30 years. Keeping the monthly mortgage payments at $1,461.26, look what happens to the purchase price. All of a sudden the buyer can now afford a home of $270,799.63, or $20,799.63 more for the same monthly payment. That's 8.3% more house.

In the third scenario the amortization period is extended from 30 years to 35 years. Keeping the monthly mortgage payment at $1,461.26, the buyer can now afford a home of $286,825.47. That's 14.7% more house than the $250,000 house having a 25 year amortization period.

A word of caution... Understand that no matter how creative the example looks, don't forget that you have to pay the money back, it's not FREE!

More house, same payment