What the mortgage really costs.
Semi-annual compounding the way Canadian lenders must quote it, with CMHC default insurance added when your down payment is under 20%.
Premium tiers from CMHC; down payment rules from the Financial Consumer Agency of Canada; compounding per the Interest Act, s. 6.
| Principal and interest | $0 |
| Property tax | $0 |
| Home insurance | $0 |
| Condo fees | $0 |
| Total per payment | $0 |
| Down payment | $0 |
| Mortgage before insurance | $0 |
| CMHC default insurance | $0 |
| Total mortgage | $0 |
Amortization is the life of the loan. Your term — the contract at this rate — is usually one to five years, after which you renew at whatever rates exist then.
Why Canadian mortgages compound differently
Canadian mortgages are not compounded monthly the way American ones are. Under section 6 of the federal Interest Act, a fixed-rate mortgage in Canada must be compounded no more than semi-annually, not in advance. A posted 4.79% is converted to a periodic rate before the payment is worked out. Running a Canadian mortgage through the American monthly formula overstates the payment slightly; this calculator uses the Canadian one.
Minimum down payment
| Purchase price | Minimum down payment | Example |
|---|---|---|
| $500,000 or less | 5% of the price | $450,000 → $22,500 |
| $500,000 – $1,500,000 | 5% of the first $500,000, then 10% | $800,000 → $55,000 |
| Over $1,500,000 | 20% — insurance unavailable | $1,700,000 → $340,000 |
Accelerated payments
An accelerated bi-weekly payment is your monthly payment halved and paid 26 times a year rather than 24 — quietly making one extra monthly payment every year. On a typical 25-year mortgage it shortens the amortization by roughly three years. Switch the frequency above and watch the payoff time move.
CMHC default insurance premiums
Premium as a percentage of the mortgage amount
| Down payment | Loan-to-value | Premium | On $500,000 |
|---|---|---|---|
| 20% or more | 80% or less | None | $0 |
| 15% – 19.99% | 80.01% – 85% | 2.80% | $14,000 |
| 10% – 14.99% | 85.01% – 90% | 3.10% | $15,500 |
| 5% – 9.99% | 90.01% – 95% | 4.00% | $20,000 |
A 30-year amortization on an insured mortgage adds 0.20%. The premium is added to your principal, so you pay interest on it for the whole amortization. In Ontario, Quebec, Saskatchewan and Manitoba, provincial sales tax applies to the premium and must be paid in cash at closing.
What this does not include
- Closing costs. Land transfer tax, legal fees, title insurance and the inspection run 1.5% to 4% of the price, in cash.
- The stress test. Lenders qualify you at the greater of your contract rate plus 2% or 5.25%, so the mortgage you qualify for may be smaller than the one priced here.
- Rate changes at renewal, prepayment privileges and variable-rate payment adjustments.