How To Use This Mortgage Calculator
The calculator updates as you type, so you can try different scenarios in seconds.
- Enter the home price and your down payment. The calculator shows your down payment as a share of the price and the minimum down payment for that price.
- Enter your interest rate. Use the rate a lender has quoted you, or today's posted rate for the term you want.
- Pick an amortization and a payment frequency. Choose from 5 to 35 years, and monthly, bi-weekly, weekly or accelerated payments.
- Review your estimate. You'll see your payment, the mortgage amount, how long it takes to pay off, the total interest and the total you'll repay. The tables under the calculator compare amortizations and show your balance year by year.
How Mortgage Payments Are Calculated In Canada
Fixed-rate mortgages in Canada are usually compounded semi-annually, not monthly, which makes the payment slightly lower than a simple loan formula gives. The calculator follows these steps:
- Mortgage amount = home price - down payment.
- Rate per payment = (1 + annual rate ÷ 2)2 ÷ payments per year - 1, the rate that matches your annual rate compounded twice a year.
- Payment = P × i ÷ (1 - (1 + i)-n), where P is the mortgage amount, i the rate per payment and n the number of payments.
- Total interest = payment × number of payments - mortgage amount.
Example: A $550,000 home with $110,000 down, at 4.5% over 25 years, costs about $2,435.28 a month on a $440,000 mortgage, with $290,584.30 in total interest. In the first year, $19,418.13 of your payments goes to interest and only $9,805.24 to the balance.
Minimum Down Payment In Canada
The minimum down payment depends on the price of the home:
| Purchase price | Minimum down payment |
|---|---|
| $500,000 or less | 5% of the price |
| $500,000 to $1.5 million | 5% of the first $500,000, plus 10% of the rest |
| $1.5 million or more | 20% of the price |
For the $550,000 example, the minimum is $30,000: $25,000 on the first $500,000 and $5,000 on the remaining $50,000.
Mortgage Default Insurance
With less than 20% down, you'll typically need mortgage default insurance, often called CMHC insurance. It protects the lender, not you, and the premium is usually added to your mortgage. CMHC's premiums depend on how much of the price you borrow:
| Down payment | Loan-to-value | Premium (on the mortgage amount) |
|---|---|---|
| 5% to 9.99% | 90.01% to 95% | 4.00% |
| 10% to 14.99% | 85.01% to 90% | 3.10% |
| 15% to 19.99% | 80.01% to 85% | 2.80% |
For example, putting 10% down ($55,000) on the $550,000 home means a $495,000 mortgage and a $15,345 premium. Added to the mortgage, it brings the payment at 4.5% over 25 years to about $2,824.62 a month. In Ontario, Quebec and Saskatchewan, provincial sales tax on the premium is due at closing and can't be added to the mortgage. The calculator adds the premium to your mortgage automatically when you put less than 20% down. Insured mortgages are only available on homes under $1.5 million.
How Your Amortization Changes What You Pay
The amortization period is the total time it takes to pay off your mortgage. A longer one lowers your payment but costs much more in interest. For the $440,000 mortgage at 4.5%:
| Amortization | Monthly payment | Total interest |
|---|---|---|
| 15 years | $3,356.62 | $164,191.53 |
| 20 years | $2,773.78 | $225,707.84 |
| 25 years | $2,435.28 | $290,584.30 |
| 30 years | $2,218.55 | $358,677.44 |
Going from 25 to 30 years saves about $217 a month but adds over $68,000 in interest. The maximum amortization on an insured mortgage (less than 20% down) is 25 years, or 30 years for first-time buyers and anyone buying a newly built home, since December 15, 2024. With 20% or more down, many lenders offer up to 30 years.
Mortgage Term Vs. Amortization
The term is how long your current contract and rate last, usually 1 to 5 years. When it ends, you renew with your lender or switch to another, often at a different rate. The amortization is the whole repayment period, across several terms. The calculator assumes your rate stays the same for the whole amortization, so treat later years as an estimate. Learn more about mortgage term vs. amortization.
Accelerated Bi-Weekly Vs. Monthly Payments
An accelerated bi-weekly payment is half your monthly payment, paid every two weeks. That's 26 half-payments a year, the same as 13 monthly payments instead of 12, and the extra payment goes straight to the balance. A regular bi-weekly payment is worked out over the same amortization, so it barely changes the total. For the $440,000 mortgage at 4.5% over 25 years:
| Payments | Payment | Paid off in | Total interest |
|---|---|---|---|
| Monthly | $2,435.28 | 25 years | $290,584.30 |
| Bi-weekly | $1,122.85 | 25 years | $289,854.90 |
| Accelerated bi-weekly | $1,217.64 | 21 years and 9 months | $246,515.50 |
| Accelerated weekly | $608.82 | 21 years and 9 months | $246,020.95 |
Most lenders let you choose accelerated payments when you sign or renew. If an accelerated payment is too tight, regular bi-weekly payments plus a lump sum when you can afford one work the same way.
How Interest Rates Change Your Payment
Even half a point makes a big difference over 25 years. On the $440,000 mortgage, monthly payments:
- 3.5%: $2,196.79 a month, $219,036.84 in interest
- 4.5%: $2,435.28 a month, $290,584.30 in interest
- 5.5%: $2,685.72 a month, $365,716.76 in interest
Fixed rates follow the bond market, while variable rates move with your lender's prime rate, which follows the Bank of Canada's policy rate:
The Bank of Canada's policy rate is 2.50% after its decision, which raised it by 0.25 percentage points. Banks usually change their prime rate by the same amount the next day. We'll show the new prime rate here once the Bank of Canada publishes it.
Source: Bank of Canada. Last verified .
Your rate also depends on your credit score, your down payment, whether the mortgage is insured and the type of lender. Compare offers from banks, credit unions and alternative lenders, or work with a mortgage broker.
How Much Mortgage Can You Afford?
Lenders look at two debt ratios. Under CMHC's limits, your housing costs (mortgage payment, property tax, heating and half of any condo fees) should be no more than 39% of your gross income, and all your debt payments together no more than 44%.
You also have to pass the mortgage stress test: lenders check that you could afford the payment at the greater of 5.25% or your rate plus 2%. At 4.5%, that means qualifying at 6.5%, a payment of about $2,947.22 a month on the $440,000 mortgage instead of $2,435.28. More on mortgage affordability.
Speak With A Mortgage Specialist
Costs A Mortgage Payment Doesn't Cover
Budget for these on top of your payment:
- Closing costs: legal fees, inspection, land transfer tax and adjustments, usually 1.5% to 4% of the price, paid in cash at closing.
- Property tax: set by your municipality, based on the home's assessed value.
- Home insurance: required by your lender.
- Utilities: heat, electricity, water and internet.
- Maintenance and repairs: many owners set aside 1% to 3% of the home's value each year.
- Condo fees, if you buy a condo.
Mortgage Calculator FAQs
How much is the monthly payment on a $500,000 mortgage?
At 4.5% over 25 years, about $2,767.36 a month, with $330,209.43 in total interest. Over 30 years, it's about $2,521.08 a month. Enter your own rate in the calculator above for your number.
How is mortgage interest calculated in Canada?
Fixed-rate mortgages are usually compounded semi-annually, and interest is charged on the balance you still owe. Early payments are mostly interest; as the balance goes down, more of each payment goes to principal while the payment stays the same.
What is the minimum down payment in Canada?
5% of the first $500,000 of the price, plus 10% of the part between $500,000 and $1.5 million. From $1.5 million, it's 20% of the price. With less than 20% down, you'll also need mortgage default insurance.
What is the longest amortization I can get?
With less than 20% down, 25 years, or 30 years if you're a first-time buyer or buying a newly built home. With 20% or more down, many lenders offer up to 30 years, and a few go longer.
Are accelerated bi-weekly payments worth it?
Usually, if your budget allows it. You pay the equivalent of one extra monthly payment a year, which on a $440,000 mortgage at 4.5% pays it off about 3 years sooner and saves over $44,000 in interest.
What is the mortgage stress test?
To qualify, you must show you could afford your payments at the greater of 5.25% or your contract rate plus 2%. It limits how much you can borrow, not the rate you pay.
Does this calculator include mortgage insurance and property tax?
It includes mortgage default insurance: with less than 20% down, the premium is added to your mortgage, as lenders do. It doesn't include property tax, home insurance or other costs, so budget for those separately.
Are the results of this calculator exact?
No, they are estimates. Your real payment depends on your rate, your lender's compounding and rounding, and any insurance premium. Rates also change when you renew. Use the results to compare scenarios and set a budget.
Note: Loans Canada does not arrange, underwrite or broker mortgages. We are a simple referral service.
Glossary
| TERM | DEFINITION |
|---|---|
| Appraisal | An appraisal involves assessing the value of a property based on current market values and is conducted by an appraiser that is typically assigned by a lender. The appraisal is then used by the lender to determine whether or not to extend a mortgage to a borrower. |
| Bridge Loan | A bridge loan is a type of short-term loan that may be used to "bridge" the gap between carrying a mortgage on an existing home and covering the mortgage for a new home. These are usually obtained when the closing dates of a home sale and purchase overlap, requiring the seller to continue paying the mortgage on the existing home before it closes while paying the mortgage on a new home. |
| Canadian Housing and Mortgage Corporation (CMHC) | A governing body in Canada that oversees and executes several federal housing projects in relation to the National Housing Act. |
| Cash-Back Mortgage | A cash-back mortgage allows borrowers to obtain the mortgage principal and a percentage of the loan amount in cash, which can come in handy to cover the cost of certain expenses, such as making home improvements or paying for car repairs. Rates on these types of mortgages tend to be higher compared to other home loans. |
| Closed Mortgage | A closed mortgage allows borrowers to prepay only a certain amount of the principal without being charged a prepayment penalty fee. Fixed-rate closed mortgage prepayment penalties are usually 3-months' worth of interest or the interest rate differential, whichever of the two is greater. |
| Closing Costs | Before a real estate transaction closes, certain closing costs will need to be paid, which can include real estate commissions, lawyer fees, land transfer taxes, appraisal fees, home inspection fees, adjustments, and others. |
| Conditional Offer | A conditional offer is not yet final and means that there are certain conditions that must be fulfilled by the buyer, seller, or both before the sale is considered "firm." For instance, an offer could be conditional on the home being inspected, which the buyer must be satisfied with. |
| Construction Mortgage | A construction mortgage allows borrowers to finance the cost of construction of a new home or major renovations. |
| Debt Ratio | Your debt ratio determines your ability to pay off a mortgage by measuring your debt relative to your income. Lenders look at debt ratios to assess a borrower's ability to make mortgage payments. A high debt ratio means your debt load is too high relative to your income. Gross debt service ratio refers to your debt that does not include a mortgage payment, and total debt service ratio refers to your total debt including mortgage payments. |
| Deed | A deed is a document signed by the seller that transfers ownership from the seller to the buyer. |
| Down Payment | A down payment is the money that is put toward the purchase price of a home. The required down payment will depend on a number of things, such as the type of mortgage being taken out and the cost of the house. |
| TERM | DEFINITION |
|---|---|
| Firm Offer | An offer goes "firm" after all conditions have been satisfied and signed off by all parties. A sale can also be immediately firm if no conditions are included. |
| Fixed-Rate Mortgage | A fixed-rate mortgage means that the interest rate does not change throughout the entire mortgage term. Even if posted interest rates go up or down during the term, your rate will be locked in and stay the same until the term ends. |
| Foreclosure | Foreclosure is an unfortunate situation in which a homeowner loses possession of the title of their home as a result of mortgage payment defaults. When mortgage payments are missed, the foreclosure process may begin after a certain number of days have passed. In this case, the lender can take over the home under a "power of sale," after which the homeowner may still have a chance to make good on their mortgage payments and bring their debt up to par. Otherwise, the lender may make efforts to sell the property to recover any money they are owed. |
| Gross Debt Service Ratio | A gross debt service ratio is the measure of housing-related debt relative to a borrower's income. GDSR is a factor that lenders consider when determining whether or not to approve a mortgage application. |
| High-Ratio Mortgage | A high-ratio mortgage refers to a mortgage in which the principal is greater than 80% of the property's value. That means more than 80% of the home's value must be borrowed in order to buy a home, while the down payment is less than 20% of the property value. High-ratio mortgages require mortgage default insurance to be paid. |
| Home Buyers' Plan (HBP) | The First-Time Home Buyers' Plan (HBP) is a government incentive program that allows first-time homebuyers to withdraw up to $25,000 from their Registered Retirement Savings Plan (RRSP) - or $50,000 in total for first-time home buyers and their partner - to buy or build a home. The full amount withdrawn must be repaid within 15 years. |
| Home Equity | The equity in a home represents the value of the property, less total outstanding debt, that the owner actually owns outright. It is calculated by subtracting the total mortgage loan amount still owed by the property's value. |
| Home Equity Line of Credit (HELOC) | Using the equity in your home, you can secure a line of credit that uses the equity as collateral. The credit limit is usually equivalent to a particular percentage of your home’s value and there is a set date when the loan must be repaid. If you default on this kind of loan, the lender can repossess your home and sell it to cover the owed debt. Since there is a high risk with this type of financing, it is typically used to finance big purchases such as home improvements, education, or medical expenses. |
| Home Inspection | Many conditions can be inserted into a purchase agreement, including a home inspection. The home inspection allows buyers some time to have the property assessed by a professional to uncover any potential issues with the home before the buyer is obligated to complete the purchase. |
| TERM | DEFINITION |
|---|---|
| Interest | Interest is added to the principal amount of the mortgage and is paid to the lender in exchange for access to the funds needed to complete a real estate purchase. Interest is charged from the moment the money is received to the moment the term expires. |
| Land Transfer Tax | Land transfer taxes are charged by the province in which the property is being purchased, as well as in certain municipalities. It is a type of tax that is based on the purchase price of the property, though these taxes vary by province. First-time homebuyers are sometimes exempt from paying the entire land transfer tax amount and may be eligible for a rebate. |
| TERM | DEFINITION |
|---|---|
| Maturity Date | The maturity date is the date when the mortgage term ends. It is at this point that the mortgage must either be paid in full, refinanced, or renewed for a new term. |
| Mortgage | A mortgage is a loan that is provided by a lender to help a homebuyer complete a home purchase. Lenders provide a certain amount of money required to cover the cost of a home's purchase price while charging interest on the principal amount. The loan is collateralized by the property itself. The mortgage must be repaid according to the terms of the contract. If the loan amount cannot be repaid according to the terms, the lender has the right to repossess the property and sell it to recoup any losses. |
| Mortgage Broker | A mortgage broker is a professional who works on behalf of the borrower and finds the best mortgage product and lender among their network of lenders. |
| Mortgage Default Insurance | Mortgage default insurance is designed to protect the lenders when a borrower is unable or unwilling to repay their mortgage. This is applicable to high-ratio mortgages where the down payment amount is less than 20% of the purchase price of the property and does not apply to conventional mortgages. Borrowers are responsible for this payment. |
| Mortgage Discharge | A mortgage discharge is issued by the lender when the mortgage is paid off in full by the borrower. When the mortgage is fully repaid, it is discharged from the title to the property and certifies that the property is completely free from the mortgage debt |
| Mortgage Life Insurance | Mortgage life insurance is an optional policy that borrowers may take out. It is designed to reduce or pay off the mortgage amount (up to a certain amount) in the event of the borrower's death. |
| Mortgage Payment | A mortgage payment is the regular payment borrowers are required to make to pay off their home loan. These payments can be made monthly, semi-monthly, biweekly, or weekly, and include both principal and interest. |
| Mortgage Pre-Approval | A mortgage pre-approval involves having your credit and finances checked out before you formally apply for a mortgage once you agree to purchase a particular home. It allows you to find out how much can be afforded, how much the lender is willing to lend, and the interest rate that may be charged. Pre-approvals expire within 90 to 120 days after they are issued and are not a guarantee of final mortgage approval. |
| Mortgage Principal | The mortgage principal represents the amount of money borrowed from a lender and does not include the interest portion. |
| Mortgage Statement | Lenders typically submit a mortgage statement to borrowers on a yearly basis that details the status of the mortgage, including how much has been paid and the principal on the mortgage that still remains. |
| Mortgagee | The mortgagee is a mortgage lender. |
| Mortgagor | The mortgagor is the borrower. |
| Multiple Listing Service (MLS) | The Multiple Listing Service (MLS) is a database of listings where real estate professionals market properties they have for sale and search for properties for sale for their clients. |
| Offer | The offer represents the purchase agreement that the buyer submits to the seller and that the seller can either accept, reject, or negotiate with the buyer. The offer includes the offer price, deposit amount, closing date, conditions, and other items pertinent to the transaction. |
| Open Mortgage | An open mortgage allows borrowers to repay their loan amount in part or in full without incurring any prepayment penalty fees. Open mortgages tend to have higher interest rates compared to closed mortgages but are more flexible. |
| Posted Rate | The posted rate is the lender's benchmark advertised interest rate for mortgage products offered. These are not necessarily set in stone, but may be negotiated with the lender. |
| Prepayment | Prepayment is made when some or all of the loan amount is paid off before the end of the mortgage term. Most open mortgages can be paid off early without any prepayment penalty charges, but prepaying a closed mortgage typically comes with a prepayment charge. However, most closed mortgages allow an annual prepayment of anywhere between 10% to 20% without any penalty. |
| Prepayment Charge | When all or part of a closed mortgage is paid off before the end of the mortgage term, a prepayment charge may have to be paid to the lender. |
| Prime Rate | The prime rate advertised by a lender is typically based on the Bank of Canada's interest rate that is set each night, which may change at any time. |
| Property Insurance | Property insurance must be paid on a home throughout the mortgage term. Lenders require a policy to be held on a property before they agree to extend a mortgage, and the lender must be named on the policy. This type of insurance covers the cost of any repair or replacement as a result of damage to the home from fire or other disasters. |
| Property Tax | Property taxes are paid by homeowners to their respective municipalities to cover the cost of things such as police, garbage collection, policing, schools, and fire protection. The property tax amount paid is based on the property's value and the rate charged by the municipality. |
| TERM | DEFINITION |
|---|---|
| Qualifying Rate | A qualifying rate is the interest rate that a lender uses to assess a borrower's eligibility for a mortgage and to calculate your debt-service ratio. |
| Renewal | When the term of a mortgage expires, another term may be negotiated with the lender. If the mortgage is not renewed, it must be paid off in full. |
| Reverse Mortgage | Homeowners over the age of 55 can use a reverse mortgage to borrow as much as 50% of the home's value to be used to pay for other expenses. Payments are not made on a reverse mortgage, but interest can accrue on the loan amount until the property is sold or until the homeowner passes away. |
| Second Mortgage | A second mortgage may be taken out on a home that already has a mortgage on it. The funds accessed through a second mortgage from the home's growing equity may be used to cover other expenses, such as home renovations, but they carry more risk than first mortgages. |
| Statement of Adjustments | The statement of adjustments outlines the purchase price, deposit, and any financial adjustments that are required for taxes, utilities, or condo fees that have been prepaid by the seller and payable by the buyer to compensate the seller for fees already covered on the home. |
| Survey | A survey is a plan of the property's lot that shows the lot size and where the property boundaries and building structures lie. It will also show where any easements, right-of-ways, or overhanging structures from adjacent properties that could impact the value of the home. |
| Term | The mortgage term is the period of time that you are committed to your mortgage with your lender, including the interest rate. When the term expires, the mortgage either needs to be paid off in full, refinanced, or renewed, either with the same lender or a new one. The average term is 5 years, though it can range anywhere from 1 to 10 years. |
| Title | Title is the ownership provided to a homeowner when a property is purchased. A clear title is required by lenders before a mortgage is extended. If there are any issues with the property's title, they must be resolved before the transaction closes. |
| Title Insurance | Title insurance is meant to protect lenders and buyers from issues on the title that are discovered after the transaction closes. Title issues can include title fraud, encroachments, municipal work orders, or zoning violations. If title insurance is purchased, it will be added to the closing costs. |
| Total Debt Service Ratio | The total debt service ratio refers to the percentage of gross annual income needed to cover all debts in addition to the mortgage payments (including principal, interest, taxes, utilities, and more). |
| TERM | DEFINITION |
|---|---|
| Variable-Rate Mortgage | With a variable-rate mortgage, the interest rate will fluctuate based on a financial index. Monthly payments could remain the same, but the amount paid toward interest versus principal could change. If rates increase, more money is paid toward interest, but if rates decrease, more money goes toward the principal. |