Home › Canada Mortgage Calculator
Canada Mortgage Calculator
Built to Canadian rules: by law, a Canadian mortgage rate is compounded semi-annually (twice a year), the loan is paid off over an amortization period, and the rate is only locked for a shorter term. If your down payment is under 20%, mortgage default insurance is added automatically, the way a lender would.
Your home and mortgage
Your mortgage payment
| Mortgage amountHome price − down payment | $400,000.00 |
| Total mortgage borrowed | $400,000.00 |
| Interest paid during the termFirst 60 payments | $93,615.23 |
| Principal paid during the term | $45,969.97 |
| Balance at the end of the termWhat you renew or refinance at the end of the term | $354,030.03 |
| Total cost of the mortgageAmount borrowed + all interest over the amortization | $697,925.98 |
This is an estimate, not a mortgage approval. It assumes the rate stays the same for the whole amortization — in reality you renew at whatever rate is offered at the end of each term. Property tax, CMHC insurance tax where it applies, and closing costs are not included. Buying in the US instead? Use the US Mortgage Calculator — the rules are different.
How the math works
A Canadian mortgage rate is a nominal rate compounded semi-annually. That means interest is calculated twice a year, so the monthly rate is not the annual rate divided by 12. First the semi-annual rate is converted into an equivalent monthly rate:
where payments = amortization years × payments per year. For other payment frequencies, the same idea applies: the periodic rate is the semi-annual rate converted to that period. Because semi-annual compounding is slightly gentler than monthly compounding, a 5.00% Canadian mortgage has an effective annual rate of (1.025)2 − 1 = 5.0625%, and its monthly rate is about 0.4124% — a touch less than the 0.4167% you'd get by dividing 5% by 12. On the worked example below, that difference is worth about $12 a month versus US-style compounding on the same rate.
Accelerated payments work differently from regular bi-weekly or weekly payments. A regular bi-weekly payment is sized to the amortization (monthly payment × 12 ÷ 26). An accelerated bi-weekly payment is simply half the monthly payment, paid 26 times a year — so you pay the equivalent of 13 monthly payments a year instead of 12, and the amortization shrinks.
If your down payment is under 20% of the price, the mortgage must be insured. The insurance premium — 2.80% of the mortgage with 15–19.99% down, 3.10% with 10–14.99% down, 4.00% with 5–9.99% down — is added to the mortgage amount and paid off over the amortization, which is why the "total mortgage borrowed" line grows when the premium applies.
Worked example (in CAD)
A $500,000 home with $100,000 down (20%), a $400,000 mortgage at 5.00%, a 25-year amortization, a 5-year term, and monthly payments:
Monthly rate: (1 + 0.05 ÷ 2)1/6 − 1 = 0.41239%
Payment: $400,000 × 0.41239% ÷ (1 − 1.0041239−300) = $2,326.42 a month
After the 5-year term (60 payments) the balance is $354,030.03 — of the $139,585.20 paid in the term, $93,615.23 was interest and $45,969.97 was principal.
Over the full 25 years, total interest is $297,925.98. Switching to accelerated bi-weekly payments of $1,163.21 would pay the mortgage off in about 21½ years and save roughly $48,349 in interest.
Common gotchas
- Term is not amortization. A 25-year amortization with a 5-year term means the rate, and the contract, end after 5 years — the balance of about $354,030 in the example then renews at whatever rate is offered at that time. If rates have risen, the new payment can jump sharply. Budget for the renewal, not just the first term.
- You have to pass the stress test. Federal rules (the B-20 mortgage stress test) require you to qualify at the higher of your contract rate plus 2%, or the Bank of Canada's qualifying rate — not at the rate you'll actually pay. The home you can be approved for is smaller than the payment alone suggests.
- Under 20% down costs more than the premium. The CMHC premium is added to the mortgage, so you also pay interest on it for the entire amortization. Minimum down payment is 5% of the first $500,000 of the price plus 10% of the portion above that, and homes at or above the insured price cap need 20% down and can't be insured at all.
- 30-year amortizations are restricted. For insured mortgages, a 30-year amortization is generally available only to first-time buyers and to buyers of newly built homes; most other borrowers are capped at 25 years. Uninsured mortgages follow the lender's own rules.
- Breaking a fixed mortgage early can be expensive. The penalty is usually the greater of three months' interest or the interest rate differential (IRD) — on a large balance with years left in the term, the IRD can run into the tens of thousands. Variable-rate mortgages usually carry only the three-months'-interest penalty.
- "Bi-weekly" doesn't always mean accelerated. Regular bi-weekly payments are just the monthly total spread over 26 payments — the amortization doesn't change. Only the accelerated version adds the extra monthly payment a year that actually pays the loan down faster.