How Much Does A $700,000 Mortgage Cost In Canada

How Much Does A $700,000 Mortgage Cost In Canada

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated May 11, 2022

If you’re ready to buy a home, have you crunched the numbers to see how much you’d have to spend? More specifically, have you considered how much your monthly mortgage payments would be based on home prices and how much of a loan you’d need to finance this purchase?

Given the cost of homes these days, it’s not uncommon for Canadians to carry sizable mortgages, such as $700,000. Using this hypothetical mortgage amount, let’s take a closer look at what your mortgage payments would be and all the costs associated with your home loan. 

What Would Your Mortgage Payments Be For A $700,000 Mortgage? 

If you’re looking to purchase a house valued at $700,000, your mortgage payments will vary depending on a few factors, including your down payment, payment frequency, amortization period, and interest rate. 

To help illustrate how much your mortgage payments will be for a $700,000 house, we’ve outlined a few variations below using an interest rate of 3.5%, a down payment of 20% ($140,000) and a 5-year term to help you get an idea of how much your mortgage payments will be.

Payment Amounts For Homes Valued At $700,000 

With a 20% down payment, your $700,000 house would require a mortgage of $560,000. 

Payment Frequency15-Year Amortization25-Year Amortization30-Year Amortization
Bi-Weekly Payment$1,843.40$1,289.79$1,156.46
Monthly Payment$3,996.40$2,795.91$2,506.76

Payment Amounts For $700,000 Mortgages 

If you get a $700,000 mortgage using an interest rate of 3.5% and a 5-year term, you’d pay the following amount for your mortgage payments. 

Payment Frequency15-Year Amortization25-Year Amortization30-Year Amortization
Bi-Weekly Payment$2,304.25$1,612.24$1,445.57
Monthly Payment$4,995.50$3,494.89$3,133.45

As you can see, your mortgage payments will be significantly less when you choose a longer amortization period because you’ll have a much longer time frame to repay your loan amount. This will make budgeting for your mortgage much easier. But keep in mind that extending your amortization period will mean more interest overall, which we’ll get into next.

How Much Interest Would You Pay On A $700,000 Mortgage?

The amount you’ll pay in interest over the life of your loan will depend on the length of your amortization period, your payment frequency and the interest rate you pay. 

Let’s illustrate how much interest you’d pay on a $700,000 mortgage based on 15- and 25-year amortization periods at varying rates and monthly installments:

RateInterest Paid Over
15-Year Amortization Period
Interest Paid Over
25-Year Amortization Period
1.5%  $81,871.58 $139,405.97
2.0%$110,340.49$189,247.55
2.5%$139,388.16$240,729.08
3.0%$169,007.38$293,815.55
3.5%$199,190.37$348,467.70

Choosing a shorter amortization period might mean higher mortgage payments, but you’ll pay significantly less in interest over the life of your loan. Plus, you’ll be mortgage-free a lot sooner. 

How Much Do You Need As A Down Payment For A $700,000 Mortgage? 

When you apply for a mortgage, you’ll need to come up with a lump sum of money upfront. Even though the lender will be supplying you with a loan to finance your home purchase, you’ll still be expected to pay out a certain amount that will go towards the purchase price of the home. 

The down payment amount you make will depend on a few factors, including the price of the home, the type of mortgage you apply for, and your financial and credit profile. That said, the minimum down payment requirements are as follows:

Price of the HomeMinimum Down Payment Required
$500,000 or less5%
More than $500,0005% down on the first $500,000, 10% on the remainder

Based on these figures, you’d require the following down payment amounts as a bare minimum:

Price of HomeMinimum Down Payment Amount
$400,000$20,000
$500,000$25,000
$750,000$50,000

Should You Put A Higher Or Smaller Down Payment? 

You can always put more towards your down payment than just the minimum. In fact, you may be better off doing so, for a few reasons. 

  • Lower Mortgage Amount – A higher down payment means a lower loan amount, which usually translates into lower monthly payments.
  • Better Rates – A higher down payment amount lowers the lender’s risk. In turn, this means a potentially lower interest rate, which can save you a ton of money over the long run. 
  • Avoid Mortgage Default Insurance –  A down payment of at least 20% of the purchase price of the home means you can skip the mortgage default insurance premiums, saving you even more money. 

How Much Mortgage Loan Insurance Would You Need If You Made The Minimum Down Payment On A $700,000 House? 

Down payments of less than 20% of the purchase price of a home will mean that mortgage default insurance will be required. This type of insurance is meant to protect lenders from mortgage defaults and allow borrowers the ability to purchase a home with as little as 5% down.

As the borrower, you’re required to pay these insurance premiums, which can be paid as a lump sum upfront or you can have it added to your mortgage and included in your payments. The exact cost of the premium depends on the loan-to-value ratio (LTV). Your LTV is calculated by dividing the loan amount by the purchase price of the home. 

The following chart illustrates how much your premiums will cost you based on different LTVs:

LTVPremium on Mortgage Amount
Up to and including 85%2.80%
Up to and including 90%3.10%
Up to and including 95%4.00%

Do note, that lenders may still take our CMHC insurance on your mortgage for down payments of 20% or more. 

For example, if you buy a home for $700,000 and make a 15% down payment ($105,000), your mortgage insurance premium rate would be 2.80%. This rate would be applied to the loan amount ($595,000), which would come out to $16,660. 

This amount would then be added to your loan amount, so your total mortgage amount would be $611,660 ($595,000 + $16,660). 

Can You Qualify For The First-Time Home Buyer Incentive With a $700,000 Mortgage?

The First-Time Home Buyer Incentive is a program that offers first-timers 5% or 10% of the home’s purchase price as a down payment. This helps make buying a home more affordable by lowering your mortgage carrying costs.

However, there are eligibility criteria to meet in order to qualify for this program, including the following:

  • You (or your partner) are a first-time homebuyer
  • Your total annual income is less than $120,000 (or $150,000 if you’re buying in Toronto, Vancouver, or Victoria)
  • Your total amount borrowed is less than 4 times your annual income (or 4.5 times if you’re buying in Toronto, Vancouver or Victoria)

Since the incentive caps eligible mortgages at 4 times the maximum household income of $120,000 (or $480,000), a $700,000 mortgage would not qualify. Even if the annual income amount increases to 4.5 times the maximum annual income of $150,000 for home purchases in Toronto, Vancouver, or Victoria (or $675,000), you’d still fall short. 

Final Thoughts

A $700,000 mortgage can take different forms in terms of mortgage payment amounts. Depending on the interest rate, amortization length, and payment frequency, your mortgage payment amounts and the overall cost of your loan can vary significantly.

Lisa has been working as a writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same. She's used a variety of financial tools over the years and is currently growing her money with Wealthsimple, while stashing some capital in a liquid high-interest savings account so that she always has a financial cushion to fall back on. She's also been avidly using her Aeroplan TD credit card to collect as many Aeroplan points as possible to put towards her travels!

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