Mortgage calculator Canada

How the payment is calculated in Canada

Canadian lenders compound fixed rates twice a year, so the monthly rate is (1 + rate ÷ 2)^(1/6) − 1. The Financial Consumer Agency of Canada’s example, $300,000 at 4% over 25 years, comes to $1,578 a month. Bi-weekly and weekly payments are the monthly payment × 12 ÷ 26 or ÷ 52; accelerated bi-weekly and weekly payments are the monthly payment ÷ 2 or ÷ 4, which repays the loan sooner. The amortization is the whole repayment period; the term, usually 5 years or less, is how long the rate lasts before renewal.

For equal payments, the calculator uses the annuity formula: payment = loan × i ÷ (1 − (1 + i)^−n), where i is the interest rate for one payment period and n is the number of payments. Each payment first covers that period’s interest, and the rest reduces the balance.

Sources: Interest Act, section 6; Financial Consumer Agency of Canada; CMHC; RBC and TD mortgage calculators.

Term and amortization

The amortization is how long it takes to repay the whole mortgage: at most 25 years with an insured mortgage, or 30 years for insured first-time buyers and new builds since 15 December 2024. The term is how long your contract and rate last, usually 5 years or less; at renewal the remaining balance gets a new rate. Enter a term to see that balance.

Payment frequencies

Monthly, semi-monthly, bi-weekly and weekly payments add up to the same yearly amount. Accelerated bi-weekly and weekly payments are half or a quarter of the monthly payment, so over a year you pay the equivalent of 13 monthly payments instead of 12, and the mortgage ends sooner.

Mortgage default insurance

A purchase with less than 20% down needs mortgage default insurance by law. The premium depends on your loan-to-value: 2.80% of the loan up to 85%, 3.10% up to 90% and 4.00% up to 95%, plus 0.20 percentage points for amortizations over 25 years. It is usually added to the mortgage and charged interest. In Ontario, Quebec and Saskatchewan, provincial sales tax on the premium is paid at closing and cannot be added to the loan.

Minimum down payment

The minimum down payment is 5% of the first $500,000 of the price and 10% of the part from $500,000 to $1.5 million. Homes priced at $1.5 million or more need at least 20% down and cannot have insured mortgages.

What goes into the payment

The headline figure is the principal and interest you pay the lender each period. Tick Include running costs to add the property costs you enter: yearly and quarterly amounts are converted to the payment period and added to the total. One-off costs, such as an insurance premium or guarantee fee paid up front, appear in the breakdown but not in the regular payment. Purchase taxes and closing costs are not included.

In Canada they are property tax, property insurance, which lenders require, and condo fees. Mortgage loan insurance is not a running cost: its premium is added to the loan.

How mortgages differ between countries

Most of the 21 countries here apply the yearly rate ÷ 12 to the balance each month. Canada compounds fixed rates twice a year, Belgian law converts the yearly rate to an equivalent monthly rate, Swiss lenders charge simple interest each quarter, Danish mortgage-credit loans follow quarterly bond payments, and some Austrian and Finnish loans count actual days ÷ 360. Lenders in Australia, New Zealand and the UK calculate interest daily.

The equal-payment annuity is standard almost everywhere. Sweden usually repays a fixed share of the original loan each year, so payments fall over time, and Belgium, the Netherlands, Norway, Finland, Iceland and New Zealand also offer equal-principal loans. In Germany you choose the first year’s repayment rate and the loan length follows. Swiss loans only need to be repaid down to two thirds of the property’s value, and Icelandic indexed loans have a balance that rises with inflation.

Monthly payments are the norm. Canada offers six schedules, including accelerated bi-weekly and weekly payments; Australia and New Zealand allow weekly and fortnightly payments; Sweden, Denmark and Italy allow quarterly payments, Italy also half-yearly; and Swiss interest is due each quarter.

In the United States, France, Italy and Spain the rate often lasts for the whole loan. Elsewhere it is usually fixed for a shorter period, such as a term of 5 years or less in Canada or 10 years in the Netherlands, and then reset; the calculator shows the balance when that period ends.

Mortgage insurance paid by the borrower is rare outside North America and Australia. US lenders may require monthly PMI with less than 20% down; Canadian and Australian buyers with a smaller deposit pay a one-off premium; New Zealand banks add a margin to the rate; the Dutch NHG and the Finnish state guarantee charge a one-off fee; and Danish mortgage-credit loans carry an ongoing contribution fee.

Outside the United States, property tax is never a percentage of the purchase price. It depends on a band, an assessed or cadastral value or a local rate, so the calculator asks for the yearly amount in every country.

Frequently asked questions