Money

Methodology

How every calculator on this site works: the formulas, the assumptions, where the rules come from, what is rounded, what is deliberately left out, and how to tell us we are wrong.

The rules this site is built under

  1. No figure is invented. A number is either transcribed from the authority that published it, or it is a convention that says it is one, or it is something you typed. Nothing else ships.
  2. A gap is named rather than filled. Where something could not be verified it is left out and said so. An estimate that quietly omits a real cost is worse than one that tells you it is missing.
  3. Government rules and market conventions are never mixed. Land transfer tax is computed and shown as computed. A lawyer's fee is an editable estimate and shown as one.
  4. Nothing here is a decision. No calculator says approved, declined or qualified, because this site has no standing to.

Mortgage payments

Canadian fixed-rate mortgages compound semi-annually, whatever the payment frequency. The periodic rate is i = (1 + r/2)^(2/n) - 1 where r is the annual rate and n is payments a year, and the level payment is P = L x i / (1 - (1+i)^-N). Applying the American monthly convention overstates a $500,000 payment at 5% by roughly $15 a month.

Schedules are walked period by period rather than derived, so the interest total is exact rather than approximated, and so a lump sum or an extra payment can change the path. Payments are rounded to the cent, which leaves a small stub after the final scheduled period; that stub is folded into the last regular payment, which is how a lender settles it rather than billing an extra month.

An accelerated frequency is a lender rule, not a formula: half the monthly payment twenty-six times a year, which is thirteen monthly payments worth of money. The shorter amortization falls out of that rather than being solved for.

Down payments and mortgage insurance

The minimum down payment is marginal: 5% of the first $500,000, 10% of the portion up to $1,500,000, and 20% of the whole price at or above that, where default insurance stops being available.

The premium is a percentage of the loan that steps with the loan-to-value ratio. It is zero at or below eighty per cent: the published bands below that price lender-paid portfolio insurance, which a buyer never pays. A thirty-year insured amortization carries a further 0.20% and is available only to a first-time buyer or on a newly built home, and only above eighty per cent loan to value.

Debt service ratios and the qualifying rate

Gross debt service is the mortgage payment, property tax, heating and half of any condominium fee, against gross income. Its insured maximum is 39%. Total debt service adds every other debt payment and its maximum is 44%. Both are editable on the page, because individual lenders apply their own.

The qualifying rate is the greater of your contract rate plus 2 points and 5.25%. Affordability is solved at that rate rather than at the rate you were quoted, because that is the payment a lender tests you against.

There is no closed form for the maximum price, because the premium and the minimum down payment both step with price and the premium feeds back into the loan. The answer is found by bisection, which halves the search range each pass and so terminates structurally rather than by hoping a smoother method converges across a band edge.

The affordability assessment

The three bands on can I afford it are this site's editorial judgement and nobody else's. They are not a lender's rule and not a published standard. They are stated here so you can disagree with them.

A result never improves once something has worsened it. Note that these measure against take-home pay, unlike the lender ratios above, which measure against gross. The two answer different questions and the difference is deliberate.

The take-home estimate

Where a calculator estimates your take-home pay, it applies the same Canadian tax engine that powers Salary After Tax: federal and provincial income tax, CPP or QPP, and EI or QPIP, at published rates. Two incomes are computed separately and added, because tax is progressive and individual.

It applies the basic personal claim and nothing else. It knows nothing about your TD1 credits, RRSP contributions, pension adjustments, union dues, a second job or self-employment. Every page that uses it offers a field to enter your real figure, and that figure is always better.

Closing costs

Land transfer tax is marginal: each band's rate applies only to the slice of the price inside it. Registration fees round their step count up, because the schedules read "or portion thereof". Where a tax is municipal rather than provincial, the page asks for a municipality, and only municipalities whose rate could be verified are offered.

Statutory costs and estimated costs are shown in separate groups and never totalled together into a single undifferentiated figure. Every estimate carries the basis its default came from.

Selling costs

Commission is tiered where the local convention is tiered, and sales tax is applied on top of the commission rather than inside it, which is how it is billed. Prepayment penalties are taken as an input and never estimated: on a fixed rate the penalty depends on an interest rate differential computed from the lender's own posted rates, and any figure produced here would be a guess presented as arithmetic.

Rent versus buy

Both households start with identical cash and, each month, whichever has the lower outlay invests the difference. Both sides are credited with it. Net worth is measured as though the home were sold that month, costs of sale included, so a liquid portfolio is not being compared against an illiquid house.

Appreciation, rent inflation and investment return are your assumptions. They move the answer more than anything else on the page, and the most useful thing to do with that calculator is to change them and see how far the break-even year moves.

Debt and credit cards

Consumer credit compounds monthly, not semi-annually. A payment at or below the monthly interest never clears the balance, and the calculator says so rather than returning a very large number of months. Minimum payments that are a percentage of the balance decline as the balance does, which is why they take years.

Growth and savings goals

Annual rates are converted to periodic ones geometrically, as (1 + r)^(1/p) - 1. Dividing by the number of periods would compound to more than the annual rate entered. Contributions land at the end of each period unless stated. Projections in today's money discount the nominal figure by the inflation rate you supply.

Vehicles

Sales tax is charged on the price plus the fees on the bill of sale. Whether a trade-in reduces the taxable base is a provincial rule and travels with the province. The federal luxury tax above $100,000 and British Columbia's higher rates on expensive vehicles are not modelled, so the tax is understated at a high price.

Rounding

Amounts are held as dollars and rounded to the cent at each published boundary. Headline figures are shown in whole dollars, where cents are noise; tables that should visibly add up are shown to the cent. Rates are held as entered. Nothing is rounded before it is used in a further calculation.

Which jurisdictions are covered

Twelve of the thirteen provinces and territories carry sourced property rules. Yukon sets its Land Titles fees in the Land Titles Tariff of Fees Regulation, and every official route to that regulation refused access when this data was compiled. Rather than publish a fee schedule nobody here has read, Yukon is left out until it can be checked.

Sales tax rates for vehicle purchases cover all thirteen, because those are federal or widely published and did not depend on the same sources.

How this is kept current

Every rule carries the date a person checked it against the authority's own page. That date is never backfilled and never copied forward from a previous year. The most recent check across the whole dataset was 2026-08-18. Rates change: a figure checked months ago may have moved, and the date is there so you can judge that yourself.

A set of automated checks runs before anything ships. They re-derive published constants rather than trusting them, assert that schedules ascend and end open, that every estimate carries a basis, that no jurisdiction is both covered and uncovered, and that the affordability copy never contains the word approved.

Telling us something is wrong

If a figure here does not match the authority it cites, that is a bug and worth reporting. Email pharaujo@gmail.com with the page, the figure and the source you are comparing against. See sources for what each number is drawn from.