Canadian Mortgage Calculator
Calculate Canadian mortgage payments in CAD ($) using semi-annual compounding rules.
Monthly Payment
What makes Canadian mortgages different
Two features separate Canadian mortgages from American ones. First, fixed-rate mortgages arecompounded semi-annually rather than monthly, which is set in the Interest Act. The effect is small but real: the effective annual cost sits slightly below what monthly compounding at the same nominal rate would produce, so a US calculator will give you a marginally wrong payment.
Second, and more consequentially, the term and the amortization are different things. The amortization is the full repayment period, commonly 25 years. The term is how long your rate and conditions are fixed, typically five years. At the end of each term the balance must be renewed at whatever rates prevail, so a Canadian borrower faces repricing several times over the life of the loan — unlike a US 30-year fixed, which locks the rate throughout.
Down payment rules follow a tiered minimum that rises with price, and anything under 20% requires mortgage default insurance, whose premium is usually added to the principal rather than paid upfront. Stress testing requires qualifying at a rate above the contract rate, which reduces the amount you can borrow. Budget for renewal risk: the payment you can afford today is not necessarily the payment you will face at the next term.
Frequently asked questions
How is a Canadian mortgage interest calculated?
By Canadian law, fixed-rate mortgage interest is compounded semi-annually, not monthly.
Why do Canadian mortgages use semi-annual compounding?
The Interest Act requires that fixed-rate mortgage interest be compounded no more than semi-annually, unlike US mortgages which compound monthly. That makes the effective rate slightly lower than a US mortgage at the same nominal rate, and it means a US calculator will overstate a Canadian payment.
What is the difference between the term and the amortisation period?
Amortisation is how long the mortgage takes to repay in full, commonly 25 years. The term is the length of the current contract, typically five years, after which you renew at whatever rates then prevail. Canadians therefore face renewal risk that a US 30-year fixed borrower does not.
How much down payment do I need in Canada?
Minimum 5% on the first $500,000, 10% on the portion between $500,000 and $1.5 million, and 20% above that. Below 20%, mortgage default insurance through CMHC or a private insurer is mandatory and the premium is added to the loan. Buyers must also pass the mortgage stress test at a qualifying rate above the contract rate.