1. Buying your first home is exciting, especially when you find a good deal on it, but a lot of people don’t realize that by the time they pay it off, they’ve paid nearly double the purchase price!

2. DEFINITIONS  Mortgage: a loan secured by the value of a real estate property  Fixed Rate Mortgage: Mortgage with a fixed interest rate  Amortization: The gradual elimination of a debt or liability  Amortization Period: The time for which the calculation of a mortgage payment is determined  Term: Length of the mortgage agreement. (can be modified afterwards).

3.  Using CanadaMortgage.com, let’s work out an actual mortgage: Down Payment Amount to Mortgage Mortgage Term Interest Rate Amortization Period Payment Schedule $20,000$380,0005 years6%25 yearsMonthly

4. Home Financing... % Down Payment5 % Mortgage TERM :5 Yr Down Payment$ 20,000 First Mortgage Amount$ 380,000 Insurance Fee ( 3.25 % of mortgage )$ 12,350 Total Mortgage Amount$ 392,350 Monthly Mortgage Payment$ 2,510 Monthly Property Taxes$ 0 Monthly Condo Fees$ 0 Monthly Heating Costs$ 0 TOTAL Monthly Payment$ 2,510 Household Income Required$ 131,607 Down Payment Amount to Mortgage Mortgage Term Interest Rate Amortization Period Payment Schedule $20,000$380,0005 years6%25 yearsMonthly

5. Kara recently bought her first home for $255,000. As a first- time homebuyer, Kara can make a 5% down payment on the house and take out a mortgage for the remaining balance. Her mortgage broker found a bank offering an annual interest rate of 5.49% for a five-year fixed rate mortgage based on an amortization period of 25 years.

6. 1. Calculate the down amount & amount to be mortgaged. Down Payment: $255,000 x 0.05 = $12,750 Mortgage: $255,000 - $12,750 = $242,250 Down Payment Cost of Home Mortgage Term Interest Rate Amortization Period Payment Schedule 5%$255,0005 years5.49%25 yearsMonthly

7. 2. Calculate the monthly payment: Using CanadaMortgage.com Home Financing... % Down Payment5 % Mortgage TERM :5 Yr Down Payment$ 12,750 First Mortgage Amount$ 242,250 Insurance Fee ( 3.25 % of mortgage ) $ 7,873 Total Mortgage Amount$ 250,123 Monthly Mortgage Payment $ 1,525 Monthly Property Taxes$ 0 Monthly Condo Fees$ 0 Monthly Heating Costs$ 0 TOTAL Monthly Payment $ 1,525 Household Income Required $ 83,899 $ 1,477

8. 3. Calculate the total amount paid over 5 years. In 5 years, there is (5 x 12) 60 months, and every month, Kara pays S1477.26, so in five years she pays a total of: $1477.26 x 60 = $88,635.60.