How much interest would I pay on a $500,000 mortgage?
Find out what your monthly payment and total interest could look like on a $500,000 mortgage.
Approved for a mortgage of $500,000? You might wonder how much your monthly repayments will cost you on a half a million dollar mortgage – and whether you can afford them with your income. Here’s a breakdown of what you might face monthly, in interest and over the life of a $500,000 mortgage.
Monthly payments on a $500,000 mortgage
At a 5.0% fixed interest rate, your monthly mortgage payment on a 25-year mortgage might total $2,908.02 a month, while a 15-year might cost approximately $3,940.62 a month.
Note that your monthly mortgage payments may differ slightly depending on the type of interest rate (fixed, variable, etc.), your mortgage term, payment frequency, taxes (such as CMHC insurance) and possible other fees.
Your total interest on a $500,000 mortgage
On a 25-year mortgage with a 5.0% fixed interest rate, you’ll pay roughly $372,407.48 in interest over the life of your mortgage.
If you instead opt for a 15-year mortgage, you’ll pay roughly $209,311.43 in interest over the life of your mortgage — or just over half of the interest you’d pay on a 25-year mortgage.
Compare $500,000 mortgage lenders in Canada
Your amortization period is the total number of years you have to pay off your mortgage.
When you sign on for a mortgage, you agree to pay the principal amount and the interest over the life of the mortgage. Your interest rate is applied to your principal amount, and as you pay down your principal amount, the amount you pay in interest changes. Amortization means that at the beginning of your mortgage, a big percentage of your payment is applied to interest. With each subsequent payment, you pay more toward your principal amount and less toward interest.