Calculate your monthly mortgage payments in Canada with semi-annual interest compounding. Get detailed amortization schedules and total cost breakdowns for informed home buying decisions.
Canadian mortgages differ from those in other countries due to their unique interest compounding structure and regulatory environment. In Canada, mortgage interest is compounded semi-annually, not monthly like in the United States, which affects your payment calculations and total interest costs.
The Canadian mortgage system is designed to protect both lenders and borrowers, with strict lending standards and government oversight ensuring stability in the housing market.
Mortgage Term: The length of your current mortgage contract (typically 1-5 years). At the end of each term, you must renew your mortgage, potentially at a new interest rate.
Amortization Period: The total time it would take to pay off your mortgage completely (up to 25-30 years). Your monthly payments are calculated based on this period.
For homes under $500,000: Minimum 5% down payment required.
For homes $500,000 - $999,999: 5% on the first $500,000 + 10% on the remaining amount.
For homes $1 million and above: Minimum 20% down payment required.
When your down payment is less than 20%, you must purchase mortgage default insurance through CMHC, Genworth, or Canada Guaranty. This insurance protects the lender if you default on your mortgage.
Insurance Premiums:
• 5.00% - 9.99% down payment: 4.00% premium
• 10.00% - 14.99% down payment: 3.10% premium
• 15.00% - 19.99% down payment: 2.80% premium
Fixed-Rate Mortgages: Interest rate remains constant throughout the term, providing payment predictability.
Variable-Rate Mortgages: Interest rate fluctuates with the Bank of Canada's prime rate, potentially offering savings when rates decline.
Hybrid Mortgages: Combination of fixed and variable portions, allowing you to benefit from both stability and potential savings.
All Canadian borrowers must qualify at the higher of:
• The Bank of Canada's 5-year benchmark rate
• Your negotiated rate plus 2%
This ensures you can still afford payments if interest rates rise.
Property Taxes: Vary by province and municipality, typically ranging from 0.5% to 2.5% of property value annually.
Home Insurance: Required by all lenders, costs vary by location, property type, and coverage amount.
Legal Fees: Required for property transfer, typically $1,500-$3,000.
Land Transfer Tax: Provincial tax on property purchases, varies by province and property value.
First-Time Home Buyer Incentive: Shared equity mortgage with the Government of Canada for eligible buyers.
Home Buyers' Plan (HBP): Withdraw up to $35,000 from your RRSP to purchase your first home.
GST/HST New Housing Rebate: Partial rebate of GST/HST paid on new home purchases under certain conditions.
Renewal Process: At the end of your term, you can renew with your current lender or switch to another lender for potentially better rates.
Portability: Many mortgages allow you to transfer your existing mortgage to a new property, maintaining your current rate and terms.
Prepayment Options: Most Canadian mortgages allow annual prepayments of 10-20% of the original principal without penalty.