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Mortgage payment calculator with Canadian compounding
Estimate payments and lifetime interest using Canadian fixed-rate mortgage conventions.
Mortgage payment
Your payment and total interest
Fixed-rate illustration with semi-annual compounding. Excludes insurance, property taxes and fees; assumes the same rate throughout amortization. Down payment must be less than the home price.
Estimated payment
$2,950.7712 payments per year · Mortgage principal $520,000.00
- Principal 59%
- Interest 41%
- Mortgage principal
- $520,000.00
- Total interest over amortization
- $365,230.71
- Total principal + interest
- $885,230.71
Before you rely on it
What to know
The assumptions and limits behind this estimate.
01
Canadian compounding
The nominal annual rate is converted using semi-annual compounding before the payment frequency is applied.
02
For comparing options
Use it to compare amounts, terms and payment schedules. Your lender decides what you qualify for, and the cost of owning a home also includes insurance, property tax and fees.
The method
How it's calculated
The steps the calculator follows, in order.
01
Start with the amount borrowed
Principal is the home price minus your down payment. Insurance premiums, fees and closing costs are not added.
02
Convert the quoted rate
Canadian fixed-rate mortgages are usually quoted with interest compounded twice a year, not monthly. The calculator turns the annual rate into a monthly rate: (1 + rate ÷ 2)^(1 ÷ 6) − 1.
03
Find the monthly payment
A standard loan formula spreads the principal and interest into equal payments over the amortization period.
04
Adjust for how often you pay
Semi-monthly, bi-weekly and weekly payments are a year of monthly payments divided by 24, 26 or 52. Accelerated bi-weekly and weekly payments are half or a quarter of the monthly payment, so you pay the equivalent of one extra monthly payment each year.
Example
A worked example
The calculator's starting values, worked through so you can check the result above.
Take a $650,000 home with a $130,000 down payment (20%), so the principal is $520,000. The rate is 4.75% for 25 years, paid monthly.
Compounded semi-annually, 4.75% works out to a monthly rate of about 0.392%. The monthly payment is $2,950.77. In the first month, about $2,038 of that goes to interest and about $913 reduces the balance. If the rate stayed at 4.75% for all 25 years, total interest would be about $365,231.
Stretching to 30 years lowers the payment to $2,698.06, which is $252.71 less a month. Total interest rises to about $451,302, roughly $86,072 more.
Accelerated bi-weekly payments of $1,475.38 would pay the loan off in about 21 and a half years, with total interest of about $307,924. That is roughly $57,307 less than paying monthly.
Real rates change at each renewal, so treat these lifetime totals as a scenario, not a forecast.
Questions
Common questions
Short answers to what people often ask about this estimate.
Canadian fixed-rate mortgages are normally quoted that way. It means a 4.75% rate costs slightly less than the same rate compounded monthly: its effective annual rate is about 4.81%. Check how your own contract states its rate.
Regular bi-weekly payments add up to the same yearly amount as monthly payments. Accelerated bi-weekly payments are half the monthly payment, made 26 times a year. That adds up to one extra monthly payment each year, which lowers the balance faster and may reduce total interest.
The amortization is how long it would take to pay off the whole loan. The term is how long your current contract and rate last, often five years. Most people go through several terms, and the payment can change at each renewal.
If your down payment is under 20%, the maximum is 30 years for first-time buyers or new builds and 25 years otherwise. With 20% or more, your lender sets the limit.
Mortgage loan insurance, property tax, home insurance, condo fees and closing costs. A down payment under 20% typically requires mortgage loan insurance, and the premium is usually added to the mortgage.
Only as a snapshot. The calculator assumes one fixed rate for the whole amortization, and variable payments or balances can change when rates move.
Methodology
Methods and sources for every calculator
Every calculator documents its method, its assumptions and the official sources behind its rules.