Calculate your exact monthly payment using Canada's semi-annual compounding rules — with CMHC insurance and stress test built in.
How Canadian Mortgages Work
Unlike the United States, Canada's Interest Act requires mortgages to compound semi-annually, not monthly. This means your actual interest charge is slightly lower than if compounded monthly. The semi-annual compounding formula gives Canadian borrowers a small advantage: your monthly payment is roughly 0.2–0.3% lower than equivalent US mortgages at the same rate.
If you need to insure your mortgage because your down payment is less than 20%, the CMHC (Canada Mortgage and Housing Corporation) premium gets added to your principal. This insurance is mandatory for down payments under 20% and protects the lender if you default.
The OSFI B-20 stress test (in place since 2018) requires that you qualify for your mortgage at a higher rate: the maximum of 5.25% or your contract rate + 2%, whichever is higher. This stress-tested payment is what determines your borrowing limit, not your actual payment.
🏠 Mortgage Details
$
$
Enter a home price first
yr
5–30 years
%
Annual nominal rate
🇨🇦 Canadian Semi-Annual CompoundingCanadian mortgages compound semi-annually per the Interest Act of Canada. Monthly rate = (1 + r/2)1/6 − 1. This gives lower payments than US-style monthly compounding.
📊 Your Results
📅 Amortisation Schedule
Year
Principal Paid
Interest Paid
Total Paid
Balance Remaining
How It Works
Enter your home price and down payment. The calculator will tell you if CMHC insurance is required (less than 20% down).
Choose your amortisation period. Insured mortgages max out at 25 years; uninsured can go to 30 years.
Enter your mortgage rate. Check your lender's current offer or a rate comparison site like Ratehub.ca.
See your monthly payment and total cost. You'll also see your stress-test qualifying payment for reference.
Review the amortisation schedule. This shows year-by-year how much goes to principal versus interest.
Canadian Example (2026)
Ontario detached home, Greater Toronto Area
Home price: $750,000
Down payment: $75,000 (10%)
Mortgage rate: 4.89% (current renewal rate, 2026)
Amortisation: 25 years
Results:
CMHC premium: $20,925 (2.79% of insured amount = $675,000)
Total mortgage principal: $695,925
Monthly payment: ~$4,280
Stress-test qualifying payment at 6.89%: ~$5,050
Total interest over 25 years: ~$509,000
Total cost of mortgage: ~$1,204,925
What Your Results Mean
Monthly Payment
This is the principal + interest you pay each month. Your lender may also require you to pay property tax and home insurance in a single "all-inclusive" payment called PITI (Principal, Interest, Taxes, Insurance) in the US, or often as separate payments in Canada.
Stress Test Payment
This is what you must qualify for to get approved for the mortgage. Lenders use this higher rate to ensure you can afford the mortgage even if rates rise. Most borrowers pay the actual payment (at the contract rate), not the stress-test rate.
Total Interest
This is the lender's cost. On a $695,000 mortgage at 4.89% over 25 years, you'll pay roughly $509,000 in interest alone. This is why making extra payments or accelerating your amortisation can save tens of thousands.
CMHC Premium
Required if your down payment is less than 20%. The premium is a percentage of the base mortgage amount: roughly 2.8% at 15–20% down, 3.1% at 10–15% down, and 4% below 10%.
Frequently Asked Questions
What is semi-annual compounding and why does Canada use it?
Semi-annual compounding means interest is calculated and added to your balance twice a year, not monthly. The Interest Act of Canada (dating back to 1869) requires this for mortgages. The effect is that your monthly payment is roughly 0.2–0.3% lower than it would be if compounded monthly at the same rate. This is a small but real advantage for Canadian borrowers compared to US-style mortgages.
How does CMHC insurance work and who pays it?
CMHC insurance protects the lender if you default. You (the borrower) pay for it via a premium added to your mortgage. It's mandatory if your down payment is less than 20%. The premium depends on your loan-to-value ratio: roughly 2.8% for 15–20% down, 3.1% for 10–15% down, and 4% for less than 10%. This means your actual mortgage balance is higher than your down payment shortfall. You cannot avoid CMHC insurance by paying it separately—it must be rolled into your mortgage, and you'll pay interest on it for 25 years.
What is the mortgage stress test in 2026?
The OSFI B-20 stress test, active since January 2018, requires that you qualify at the maximum of 5.25% or your contract rate plus 2%, whichever is higher. For example, if your rate is 4.89%, you must qualify at 6.89%. If rates are low (say 3%), the stress rate would be 5.25%. This protects lenders and borrowers alike if rates rise sharply.
What's the maximum amortisation period in Canada?
The standard maximum is 25 years for insured mortgages (less than 20% down) and 30 years for uninsured mortgages (20% or more down). Longer amortisations lower your monthly payment but increase total interest. A 30-year mortgage at 5% will cost significantly more in total interest than a 25-year at the same rate.
Should I choose a fixed or variable rate mortgage?
Fixed-rate mortgages lock in your rate for the term (typically 3–5 years); your payment never changes. Variable-rate mortgages track the prime rate, so your payment (or the interest-only portion) fluctuates. Fixed rates are predictable and currently competitive. Variable rates can save money if rates fall, but you're exposed to rate risk. Consider your comfort with payment changes and your time horizon.
How do I reduce my total mortgage interest?
Make lump-sum payments (many mortgages allow 15–20% annual prepayments), switch to bi-weekly payments instead of monthly, or increase your regular payment amount. Shortening your amortisation from 25 to 20 years can save tens of thousands in interest. Even small increases compound dramatically over decades.
5 Practical Canadian Mortgage Tips
1. Use bi-weekly payments instead of monthly
If you're paid bi-weekly, ask your lender for bi-weekly mortgage payments. You'll make 26 payments per year instead of 12, effectively doubling your principal reduction and shaving years off your amortisation.
2. Make a lump-sum payment every year
Most Canadian mortgages allow you to prepay up to 15–20% of the principal annually without penalty. Putting your tax refund or bonus directly to your mortgage can save tens of thousands in interest over time.
3. Shop for the best rate before signing
Mortgage rates vary significantly between lenders—sometimes by 0.5% or more. Even a 0.25% difference on a $600,000 mortgage costs or saves you $1,500 per year. Use aggregators like Ratehub.ca or Borrowell to compare before you commit.
4. Stress-test yourself before applying
Calculate whether you can afford the mortgage at the stress-test rate (5.25% or higher), not just your contract rate. This is how lenders assess your risk, and it's good practice for planning if rates rise.
5. Factor in closing costs and don't skimp on inspections
Land transfer tax, legal fees, inspections, and title insurance typically cost 1.5–4% of your purchase price. Don't try to save money by skipping a home inspection—catching structural issues before you buy is worth far more than the $400–600 inspection fee.
Disclaimer: This calculator is for educational and informational purposes only. It does not constitute financial, mortgage, or legal advice. Actual mortgage payments depend on your lender, current rates, provincial taxes, closing costs, and other factors not captured in this simplified calculator. Always consult a mortgage broker or lender for exact payment quotes and pre-approval details.