When determining the size of home you can afford, it's important to look at the long term horizon. The mortgage rate you pay today could be substantially different from the mortgage rates available when the time comes to renew your mortgage.
The calculation below shows how much of your mortgage principal will be left at the end of the term.
Using this amount, below we calculate the corresponding mortgage payments at a variety of interest rates:
|Purchase interest rate||Payment|
|Average 5-year Fixed Rates (2000 - 2010)||3.89%||$-|
|Average 5-year Fixed Rates (1990 - 2000)||7.23%||$-|
|Average 5-year Fixed Rates (1980 - 1990)||11.92%||$-|
Below is a graph that displays the approximate values of competitive 5-year fixed mortgage rates since 2006.