Money

What would my mortgage payment be?

A Canadian mortgage payment on the semi-annual compounding the law requires, with default insurance where it applies, the interest over the full amortization, and the balance year by year.

What you are paying for the property.

20.0% of the price. The minimum here is $40,000.

Enter the rate you have been quoted. This site does not track market rates.

How long the mortgage takes to clear in full.

Sets the sales tax charged on any insurance premium.

Monthly payment

$2,962.48

$2,962 a month equivalent, clearing in 25 years.

Mortgage principal
$520,000
Total interest
$368,746
Total paid
$888,746
Qualifying payment
$3,574.99
The loan
Home price$650,000
Down payment$130,000 (20.0%)
Mortgage principal$520,000
Interest over the amortization$368,746
Balance at the end of a five-year term$458,706
Year by year, and the full schedule
One row a year, 25 of them
YearInterestPrincipalBalance
1$24,423$11,127$508,873
2$23,884$11,666$497,208
3$23,318$12,231$484,976
4$22,725$12,824$472,152
5$22,104$13,446$458,706
6$21,452$14,098$444,608
7$20,769$14,781$429,827
8$20,052$15,498$414,330
9$19,301$16,249$398,081
10$18,513$17,036$381,045
11$17,688$17,862$363,182
12$16,822$18,728$344,454
13$15,914$19,636$324,818
14$14,962$20,588$304,231
15$13,964$21,586$282,645
16$12,918$22,632$260,013
17$11,821$23,729$236,284
18$10,670$24,879$211,405
19$9,464$26,085$185,319
20$8,200$27,350$157,970
21$6,874$28,675$129,294
22$5,484$30,065$99,229
23$4,027$31,523$67,706
24$2,499$33,051$34,655
25$897$34,655$0

At the qualifying rate of 6.79% a lender would test you against a payment of $3,574.99, which is what you have to show you can carry rather than what you would actually pay.

How a Canadian mortgage payment is worked out

A Canadian fixed-rate mortgage compounds twice a year, whatever the payment frequency. That is a legal requirement rather than a convention, and it is the single thing most likely to make a calculator wrong: applying the American monthly convention to a $500,000 mortgage at 5% overstates the payment by about fifteen dollars a month, every month, for twenty-five years.

The periodic rate here is i = (1 + r/2)^(2/n) - 1, where r is the annual rate and n the payments a year. The payment that clears the loan in N periods is then P = L x i / (1 - (1+i)^-N). The schedule below is walked period by period rather than derived, which is what lets the interest total be exact and the balance be checkable.

Accelerated payments, and why they finish early

An accelerated bi-weekly payment is not an amortization solved for twenty-six payments a year. It is half the monthly payment, paid twenty-six times, which is thirteen monthly payments worth of money rather than twelve. The extra month goes entirely against principal, and the mortgage clears years early as a result. That is the whole mechanism, and it is why the payoff date moves without the payment feeling different.

Mortgage default insurance

Below twenty per cent down the lender is insured against your default, and you pay for it. The premium is a percentage of the loan that steps with the loan-to-value ratio, and it is normally added to the mortgage rather than paid in cash, which means you pay interest on it for the life of the loan. In Ontario, Quebec and Saskatchewan there is provincial sales tax on the premium, and that part cannot be financed: it is due in cash on closing day. See the down payment calculator for what the premium costs at different down payments.

The qualifying rate

A lender does not approve you at the rate you were quoted. It tests you at the greater of that rate plus two points and 5.25%, and the payment shown above at that qualifying rate is the one you have to demonstrate you could carry. It is not what you would pay. Since November 2024 the test is not applied to an uninsured straight switch at renewal, where you move an existing mortgage between federally regulated lenders without increasing the amount or the amortization.

An example

A $650,000 home with $130,000 down is a twenty per cent down payment, so the mortgage is $520,000 and there is no default insurance. At 4.79% over twenty-five years the monthly payment is about $2,970, and the interest over the full amortization comes to roughly $371,000, which is more than half the price of the house again. Switching to accelerated bi-weekly at the same rate clears it about three years early.

What this assumes

The rate holds for the whole amortization
It will not. A Canadian mortgage is committed for a term, usually five years, and then renewed at whatever rate is available then. The balance at the end of the term is shown above for that reason: it is the number you will actually be renewing.
Every payment is made on time and in full
No missed payments, no payment deferrals, no changes to the amount.
The premium is added to the loan
Which is the Canadian norm. You can pay it in cash instead, and doing so saves the interest on it over the full amortization.
Nothing here is a lending decision
A lender underwrites a person, not a payment: your credit history, your employment, and the property itself all matter and none of them are here.

Sources

  1. How much you need for a down payment · Financial Consumer Agency of Canada · checked
  2. Mortgage loan insurance premiums · Canada Mortgage and Housing Corporation · checked
  3. CMHC Purchase: mortgage loan insurance for homeownership · Canada Mortgage and Housing Corporation · checked
  4. CMHC Home Start · Canada Mortgage and Housing Corporation · checked
  5. CMHC Revises Homeowner Mortgage Loan Insurance Premiums · Canada Mortgage and Housing Corporation · checked
  6. Minimum qualifying rate for uninsured mortgages · Office of the Superintendent of Financial Institutions · checked
  7. Boldest mortgage reforms in decades come into force today · Department of Finance Canada · checked

The rules behind this calculator were last checked on .

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