Canadian Mortgage Calculator
Canadian mortgages compound semi-annually by law, not monthly like US mortgages. This calculator applies the correct Canadian compounding formula and includes CMHC mortgage default insurance for down payments under 20%. See your monthly payment, balance at the end of your mortgage term, and total interest over the full amortization.
You might also need
How It Works
Canadian law requires mortgage interest to compound no more than semi-annually. The stated rate is divided by 2, compounded to find the effective annual rate, then converted to an effective monthly rate. This results in a slightly lower monthly rate than US monthly compounding.
Effective monthly r = (1 + stated rate/2)^(1/6) - 15% Canadian rate: (1.025)^(1/6) - 1 = 0.4124%/mo vs 0.4167% USDown payments under 20% require CMHC default insurance. The premium depends on the down payment: 4.00% for 5% to 9.99% down, 3.10% for 10% to 14.99% down, and 2.80% for 15% to 19.99% down. The premium is added to the mortgage and amortized.
CMHC = Loan × Premium Rate; added to mortgage balance$600K home, 5% down ($30K): premium = $570K × 4% = $22,800Most Canadian mortgages have terms of 1 to 5 years within a longer amortization. At term end, you renew at the prevailing rate. The calculator shows your remaining balance — what you will refinance — at the end of your current term.
Balance = Remaining principal after term months of amortization$600K at 5.25% after 5yr: remaining balance ~$548K to renewTotal interest over the full amortization period shows the true lifetime cost of the mortgage. Canadian mortgages with 25-year amortizations can result in total interest approaching the original loan amount at moderate rates.
Total Interest = (Monthly × Total Months) - Principal$600K at 5.25% over 25yr: total interest ≈ $508KA 25-year amortization with a 5-year term means you renew 5 times over the life of the mortgage. Each renewal exposes you to prevailing rates. The balance at term end shows exactly how much you will need to renew, helping plan for rate risk.
Renewals = Amortization Years / Term Years25yr amortization / 5yr term = 5 renewals neededCrossing the 20% down payment threshold eliminates CMHC insurance, which can be 2.80% to 4.00% of the mortgage. On a $700,000 purchase, 19% versus 20% down saves $15,708 in CMHC premiums plus interest on those premiums over the amortization.
CMHC savings = (Mortgage below 20% threshold) × Premium Rate$630K vs $560K loan: CMHC on $630K = $17,640 avoided at 20%Quick Reference
Common examples — verify instantly above.
$750K, 5% down, 5.25%
Monthly payment (25yr amort)
CA$4,543/mo
CMHC on $712K loan
5% down premium (4%)
CA$28,480
$750K, 20% down, 5.25%
No CMHC, 25yr
CA$3,640/mo
Balance at term
$600K, 5.25%, after 5yr
CA$548,000 remaining
Semi-annual vs monthly
5% rate difference
Canadian saves ~$8/mo on $600K
25yr vs 30yr amort
$600K at 5.25%
CA$3,640 vs CA$3,306/mo (+$73K interest)
Stress test
At 4.5% rate
Must qualify at 6.5%
5yr term, 25yr amort
Number of renewals
5 renewals over lifetime
Tips & Shortcuts
Aim for 20% down to avoid CMHC insurance. On a $700,000 home, the difference between 19% and 20% down saves over $17,000 in premiums.
Use the balance at term end to plan for renewal. Rising rates at renewal can significantly increase your payment — stress test yourself at the renewal rate before signing.
Consider a shorter term (2 to 3 years) if rates are expected to fall. Shorter terms give more flexibility to refinance when rates drop.
Accelerated bi-weekly payments reduce the amortization by 2 to 3 years without feeling like extra payment. Most Canadian lenders offer this option automatically.
Make use of your prepayment privileges. Most Canadian mortgages allow 10% to 20% extra principal payment per year without penalty. Even one extra payment per year saves significantly.
Compare the total cost of different amortization periods. Moving from 25 years to 20 years on a $600,000 mortgage at 5.25% adds $350/month but saves $80,000 in total interest.
Common Mistakes to Avoid
Using a US mortgage calculator for a Canadian mortgage
US calculators use monthly compounding. Canadian law requires semi-annual compounding, producing different monthly payments. The difference is small but real — always use a Canadian-specific calculator.
Ignoring CMHC insurance in the budget
CMHC premiums of 2.80% to 4.00% are added to the mortgage balance and financed. On a $700,000 purchase with 5% down, this adds $26,600 to the balance before the first payment. Include it in affordability calculations.
Not saving for land transfer taxes in addition to the down payment
Ontario and BC both have significant land transfer taxes. A $700,000 purchase in Ontario triggers approximately $11,000 in provincial tax, plus up to $11,000 in Toronto municipal tax. Budget for this separately from the down payment.
Treating the mortgage term as the full repayment period
A 5-year fixed term does not mean the mortgage is paid off in 5 years. It means you will renew at whatever rate exists in 5 years. Plan for rate risk at each renewal.
Not stress testing at renewal rates
At each renewal, the stress test is re-applied. If rates rise significantly, your renewal payment could increase 20% to 30%. Understand your maximum sustainable payment before taking on a large mortgage.
Choosing the maximum amortization without comparing total cost
A 30-year versus 25-year amortization on $600,000 at 5.25% saves $334/month but costs $73,000 more in total interest. Calculate both before choosing the longer option.
Frequently Asked Questions
The Interest Act of Canada requires that mortgage interest be calculated no more frequently than semi-annually. This is different from the US where mortgages compound monthly. Semi-annual compounding results in a slightly lower effective rate than monthly compounding at the same stated rate — the effective monthly rate is slightly lower.
CMHC (Canada Mortgage and Housing Corporation) insurance is mandatory for high-ratio mortgages — those with less than 20% down payment. The premium is 2.80% to 4.00% of the mortgage amount depending on the down payment percentage. The premium is added to the mortgage balance and amortized over the full period.
Amortization is the total repayment period — typically 25 years in Canada (30 years for some insured mortgages). The term is the length of the current mortgage contract, typically 1 to 5 years. At the end of each term, you renew the mortgage at prevailing rates. The calculator shows your balance at term end — the amount you will need to renew.
For insured mortgages (down payment under 20%), the maximum amortization is 25 years. For uninsured mortgages (20% or more down), some lenders allow up to 30 years, though 25 years is most common. Longer amortization reduces monthly payments but increases total interest.
The stress test requires borrowers to qualify at either the contract rate plus 2%, or 5.25%, whichever is higher. This means even if your rate is 4.5%, you must prove you can afford payments at 6.5%. The stress test is applied at every renewal, not just initial purchase.
British Columbia charges up to 3% for properties over $2 million. Ontario has no provincial land transfer tax for first-time buyers on properties under $400,000 but charges 1.5% to 2.5% above that. Toronto has an additional municipal land transfer tax. Quebec has a welcome tax of 1% to 3% based on price.
Related Calculators
House Affordability Calculator
Find out how much home you can afford based on income.
UK Mortgage Calculator
Monthly mortgage payment using UK rates and terms.
Mortgage Payoff Calculator
See how extra payments shorten your loan and save interest.
FHA Loan Calculator
FHA monthly payment including MIP and lower down payment.
VA Mortgage Calculator
VA loan payment with no PMI and zero down payment option.
Home Equity Loan Calculator
Monthly payment for a fixed-rate home equity loan.