Take a $650,000 home with 10% down, a 4.85% rate and a 25-year amortization. The monthly mortgage payment comes to about $3,457, and that figure already covers an $18,135 CMHC insurance premium added to the loan. Change the price, down payment, rate or schedule above and the payment, interest cost and payoff time follow as you type.
How the payment is worked out
Three inputs drive it: the loan, the rate and the amortization. Canadian fixed-rate mortgages compound interest twice a year rather than monthly. A calculator built for another country can therefore miss by a few dollars every month, and this one uses the Canadian method. Variable rates are handled differently by some lenders, so treat that result as an estimate.
Down payment and CMHC insurance
The minimum down payment is 5% of the first $500,000 of the price, plus 10% of the part up to $1,500,000. From $1,500,000 up, you need 20%. Anything under 20% down means the mortgage must be insured. The premium is a percentage of the loan and gets added to it, so nothing is paid up front.
| Down payment | Premium on the loan |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
| 20% or more | None |
Stretch the amortization past 25 years and the premium rises by 0.20%. Ontario, Quebec and Saskatchewan also tax the premium, at 8%, 9% and 6%. You pay that tax in cash at closing, which is why the calculator lists it separately from the loan.
The default numbers show the difference clearly. Put 20% down on the same home and the loan is $520,000, with no premium and a payment near $2,980. That saves $476 a month.
Monthly, bi-weekly or accelerated
A regular bi-weekly payment takes the monthly amount, multiplies by twelve and splits it into 26 payments. The accelerated version is half the monthly amount every two weeks. Over a year that equals one extra monthly payment. On the default numbers, the mortgage is gone about 3.4 years sooner and roughly $67,000 in interest is saved.
What if the rate moves?
A table under the result shows the payment if your rate goes up half a point, a full point, or to the stress test rate. Federal rules have lenders test your income against the higher of your contract rate plus 2% or 5.25%. That makes the last row close to the payment a lender uses when deciding how much you can borrow.
What the payment leaves out
Property tax, heating, condo fees and home insurance sit outside a mortgage payment. For Toronto, the property tax calculator gives a first estimate. Closing day brings a bill of its own, usually led by land transfer tax, and the land transfer tax calculator works it out. To check that the payment fits your monthly budget, try the Toronto cost of living calculator.
Ways to lower the cost
A bigger down payment shrinks the loan and can remove the premium. Shorter amortization means a higher payment but far less interest. Extra payments help as well, and many lenders permit a yearly lump sum. Ask yours about the limits before counting on them.
Frequently asked questions
How is a Canadian mortgage payment calculated?
From the loan amount, the interest rate and the amortization. Fixed-rate mortgages compound interest twice a year, and the payment is set so the loan reaches zero at the end of the amortization.
How much down payment do I need in Canada?
The minimum is 5% of the first $500,000 of the price and 10% of the part up to $1,500,000. At $1,500,000 or more you need 20%.
What is the CMHC premium?
It is mortgage default insurance, required when you put down less than 20%. It is 2.80%, 3.10% or 4.00% of the loan, depending on your down payment, and it is added to the loan.
Do I pay sales tax on the CMHC premium?
In Ontario, Quebec and Saskatchewan, yes: 8%, 9% and 6%. It is paid in cash at closing and is not added to the mortgage.
Is accelerated bi-weekly better than monthly?
It pays down the loan faster because it adds up to one extra monthly payment each year. On the default numbers it saves about 3.4 years and $67,000 in interest.
What is the mortgage stress test?
Lenders check that you can afford the payment at the higher of your contract rate plus 2% or 5.25%. The table under the result shows that payment.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.