Mortgage Payment Calculator
20.0% of purchase price
How the Canadian Mortgage Calculator Works
Canadian mortgages are compounded semi-annually (not monthly, as in the US). This calculator uses the correct Canadian compounding method to give you accurate payment amounts.
The formula converts the annual rate compounded semi-annually to an effective rate per payment period:
- Semi-annual rate = annual rate / 2
- Effective period rate = (1 + semi-annual rate)^(2/payments per year) - 1
- Payment = loan × rate / (1 - (1 + rate)^(-total payments))
Understanding Your Mortgage Payment
Your mortgage payment consists of two parts:
- Principal — The portion that reduces your loan balance. This grows over time.
- Interest — The cost of borrowing. This decreases over time as your balance drops.
In the early years, most of your payment goes toward interest. As you pay down the principal, the interest portion shrinks and more goes toward building equity.
CMHC Mortgage Insurance
If your down payment is less than 20% of the purchase price, you are required to purchase mortgage default insurance (commonly called CMHC insurance). The premium is added to your mortgage amount. Use our CMHC insurance calculator for detailed premium calculations.
| Down Payment | Insurance Premium |
|---|---|
| 5% – 9.99% | 4.00% of mortgage |
| 10% – 14.99% | 3.10% of mortgage |
| 15% – 19.99% | 2.80% of mortgage |
| 20% or more | Not required |
Tips to Lower Your Mortgage Payments
- Increase your down payment — A larger down payment means a smaller loan and potentially no CMHC insurance
- Choose a longer amortization — 30-year amortization lowers payments (but increases total interest)
- Shop for the best rate — Even 0.25% lower saves thousands. See our mortgage rate comparison
- Make lump-sum payments — Extra payments go directly to principal, reducing interest
- Switch to accelerated bi-weekly — Equivalent to making 13 monthly payments per year