Mortgage Payment Calculator for Canada
This calculator works out your mortgage payment from 4 things you enter: how much you're borrowing, the interest rate, the amortization, and how often you pay. It compounds interest twice a year, the way Canadian fixed-rate mortgages are written, then shows the payment for every frequency side by side, the total interest you'd pay, and what extra payments do to both.
What do you need to enter in the mortgage calculator?
You need the amount you're borrowing, the interest rate on your offer, the amortization, and a payment frequency. Everything else is optional.
- Purchase price and down payment, or the mortgage amount if you already know it. With a price, the calculator takes the down payment percentage off and works on what's left.
- Interest rate: the yearly rate on your offer or renewal letter.
- Amortization: the number of years it takes to pay the whole balance to zero.
- Payment frequency: monthly, bi-weekly, weekly or accelerated bi-weekly.
- Prepayments (optional): a lump sum once a year, an extra amount every month, or both.
The term is how long your rate is locked, often 5 years. The amortization is the full payoff period, often 25 or 30 years, and the payment is built on it.
How is a Canadian mortgage payment calculated?
The lender works out one fixed payment that covers that period's interest and pays down enough of the balance to reach zero at the end of the amortization. Early payments are mostly interest, and later ones are mostly principal.
Canada's Interest Act requires a blended-payment mortgage to state its rate as compounded yearly or half-yearly, and fixed-rate mortgages use half-yearly. The calculator follows that. It splits the yearly rate in half, turns that half-yearly rate into the matching monthly rate, and runs the standard payment formula with it. A calculator that divides the yearly rate by 12 compounds monthly and shows a slightly higher payment than your lender will.
Which payment frequency pays off a mortgage fastest?
Accelerated bi-weekly and accelerated weekly pay a mortgage off fastest, because each year they add the equivalent of 1 extra monthly payment. Plain bi-weekly and weekly pay the same yearly total as monthly, split into smaller payments.
| Frequency | Payments a year | Each payment | Paid in a year |
|---|---|---|---|
| Monthly | 12 | The monthly payment | 12 monthly payments |
| Bi-weekly | 26 | Monthly payment x 12 / 26 | 12 monthly payments |
| Weekly | 52 | Monthly payment x 12 / 52 | 12 monthly payments |
| Accelerated bi-weekly | 26 | Half the monthly payment | 13 monthly payments |
That 13th payment goes straight to the balance, which is where the shorter payoff comes from.
What do extra payments do to a mortgage?
Every dollar you prepay comes off the balance, so you stop paying interest on it from that day. The calculator shows the interest saved and the years taken off.
Most lenders set a yearly limit on prepayments in the mortgage terms, and going over it can trigger a penalty, so check your own contract before you plan around a large lump sum.
How much down payment do you need in Canada?
You need at least 5% of the first $500,000 of the price, plus 10% of any part between $500,000 and $1,500,000. At $1,500,000 or more, the minimum is 20% of the whole price.
The calculator lets you set any down payment percentage. It doesn't check it against these rules, so work out your minimum first. On a $700,000 home, the minimum is $25,000 on the first $500,000 plus $20,000 on the next $200,000, which is $45,000.
Does the calculator include mortgage default insurance?
No. The calculator works on the mortgage amount it's given and doesn't add the insurance premium. With less than 20% down, your lender requires default insurance, and the premium is usually added to the mortgage, so the balance you pay on is higher than price minus down payment.
CMHC charges the premium as a percentage of the loan, based on how much of the home's value you're borrowing (the loan-to-value).
- Borrowing 80.01% to 85%: 2.80%
- Borrowing 85.01% to 90%: 3.10%
- Borrowing 90.01% to 95%: 4.00%
Here's that $700,000 home with the $45,000 minimum down:
- Mortgage before insurance: $655,000
- Loan-to-value: about 93.6%, so the premium is 4.00%
- Premium: $26,200
- Mortgage to enter in the calculator: $681,200
Premiums in Quebec, Ontario and Saskatchewan also carry provincial sales tax, paid at closing. BC and Alberta buyers don't pay that tax.
What should you do with your payment result?
Check that a lender will approve the payment as well as whether it fits your budget. Lenders qualify you at the higher of your rate plus 2 percentage points or 5.25%, so run the calculator a second time at that rate to see the payment you're tested on.
The qualification calculator turns your income and debts into a price range, and the READY assessment shows what's missing before a pre-approval. If you're comparing offers, book a call and we'll put the terms side by side with you.
Frequently asked questions
Why is my payment different from my bank's calculator?
- The usual causes are compounding, the insurance premium, and rounding. This calculator compounds half-yearly, as fixed-rate mortgages in Canada are written, and some online calculators compound monthly. Your lender's figure also includes any default insurance premium added to the balance, which you need to enter yourself here.
Is bi-weekly the same as accelerated bi-weekly?
- No. Bi-weekly takes your monthly payment times 12 and divides it into 26 payments, so you pay the same amount each year. Accelerated bi-weekly is half your monthly payment every 2 weeks, which adds up to 13 monthly payments a year and shortens the amortization.
Can I use this calculator for a variable-rate mortgage?
- Yes, as an estimate at today's rate. Many variable-rate mortgages compound monthly, and the rate moves with the lender's prime rate, so the real payment or the payoff date will change over the term. Rerun it whenever the rate changes.
What amortization can I choose?
- An insured mortgage (less than 20% down) is capped at 25 years, or 30 years for first-time buyers and buyers of newly built homes. With 20% or more down, many lenders allow up to 30 years. A longer amortization lowers the payment and raises the total interest.