What is the mortgage amount used for interest-only payment calculations?

Prepare for the Saskatchewan Mortgage Associate Exam with comprehensive questions and flashcards. Study effectively using multiple choice questions and hints to enhance understanding. Be exam-ready!

The mortgage amount used for interest-only payment calculations is based on the total principal that is being borrowed. This amount is critical because the interest payment is determined by applying the interest rate to the outstanding balance of the loan.

In this case, the interest payment calculation requires using the amount that will attract interest. If the correct choice is $345,000, it signifies that this is the actual mortgage amount that has been financed. To calculate the monthly interest-only payment, you would typically use the formula:

Monthly Payment = (Mortgage Amount x Annual Interest Rate) / 12

Using $345,000 provides a specific context from which one can calculate the monthly payment accurately. This understanding helps in determining affordability and managing finances better by knowing exactly how much will be spent on interest for that specific mortgage amount monthly.

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