Calculator · Canadian mortgage payments, using semi-annual compounding as required by law for fixed rates.
Mortgage payment calculator
Canadian fixed-rate mortgages are compounded semi-annually, so this calculator converts the annual rate properly before working out the payment. Add a purchase price and a down payment to see the loan-to-value too.
Run the numbers
Fixed-rate mortgages in Canada are compounded semi-annually, so the monthly rate is not simply the annual rate divided by twelve. This calculator converts correctly. Property taxes, insurance and condo fees are not included.
How this works
Why the monthly rate is not the annual rate divided by twelve
Canadian fixed-rate mortgages are compounded semi-annually by law. The nominal annual rate is first converted to an effective annual rate, and that effective rate is then converted to a monthly rate. Dividing the annual figure by twelve produces a slightly different, and slightly wrong, payment.
Amortisation is not the term
The amortisation is how long the loan would take to clear at the current payment. The term is how long the current rate and conditions are fixed, after which the mortgage renews. A 25-year amortisation with a five-year term means the payment is set for five years, and the balance is renegotiated at renewal.
What the payment does not cover
- Property taxes, which many lenders collect monthly and hold in escrow.
- Home insurance, which is required but billed separately.
- Condo fees and any special assessments.
- Mortgage default insurance, if the down payment is below the threshold.
Qualifying is a different calculation
Lenders assess whether you can carry the mortgage at a qualifying rate above the contract rate, and against a total debt service guideline of about 44% at federally regulated lenders. The payment you can afford and the mortgage you qualify for are not the same number.
Questions
Why is semi-annual compounding used?
Canadian law requires fixed-rate mortgages to be compounded semi-annually rather than monthly. The calculator converts the annual rate correctly to reflect that.
Should I choose a longer amortisation?
A longer amortisation lowers the payment and increases the total interest. It can help affordability but it costs more over the life of the loan and keeps you in debt for longer.
Does this include mortgage insurance?
No. Mortgage default insurance, property taxes, insurance and condo fees are separate costs and are not included in the payment shown.
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Lending rules and benchmark rates
The sourced rules these calculators assume.
Sources
- Financial Consumer Agency of Canada — debt and borrowing —
- Payday Lending Regulations, SOR/2024-114 —
- OSFI Guideline B-20 —
Every figure on this page is attributed to the publisher above. Where a value could not be verified against the publisher's own publication, it is left out rather than estimated.