Canadian Mortgage Calculator
Calculate monthly and bi-weekly Canadian mortgage payments using mandatory semi-annual compounding and CMHC mortgage insurance premium rules.
How It's Calculated
Formula
r_{\text{monthly}} = \left(1 + \frac{r_{\text{nominal}}}{2}\right)^{2/12} - 1Mortgage interest in Canada is regulated by the federal Interest Act, which dictates that interest on fixed-rate residential mortgages must be compounded semi-annually, not in advance. Unlike U.S. mortgages where the annual rate is divided directly by 12, Canadian lenders convert semi-annually compounded rates into an effective periodic rate before calculating monthly or bi-weekly amortizing payments.
Worked Examples
Standard Purchase: $600,000 home, $60,000 down (10%), 5.0% rate, 25-year amortization
- Down payment is 10%, which requires CMHC default insurance of 3.10% on the $540,000 loan ($16,740).
- Total mortgage financed = $540,000 + $16,740 = $556,740.
- Semi-annual effective monthly rate = (1 + 0.05 / 2)^(2/12) - 1 ≈ 0.41239% per month.
- Monthly payment over 300 months = $3,237.13.
- Total cost over 25 years = $971,139.73 ($414,399.73 total interest paid).
Frequently Asked Questions
Why are Canadian mortgage payments slightly different from US calculators?
In Canada, the federal Interest Act mandates semi-annual compounding for fixed mortgages. A standard U.S. calculator uses monthly compounding, which slightly overstates the effective periodic interest rate.
When is CMHC mortgage insurance required?
CMHC (or private equivalent) default insurance is required in Canada if your down payment is less than 20% of the purchase price. The premium is typically rolled into the total mortgage loan amount.
What is the minimum down payment in Canada?
The minimum down payment is 5% for homes priced up to $500,000. For homes priced between $500,000 and $999,999, the minimum is 5% on the first $500,000 and 10% on the remaining balance.