Last Updated: December 2025.
Use this comprehensive Canadian Mortgage Calculator to estimate your monthly payments, total interest costs, and amortization schedule. It accurately accounts for Canada’s mandated semi-annual compounding structure.
Mortgage Calculator Canada
Estimated Monthly Payment
$0.00Mortgage Calculator Canada Formula
The Canadian mortgage system mandates semi-annual compounding for fixed-rate mortgages. The key steps are calculating the equivalent periodic interest rate (r) and then applying the standard amortization formula:
1. Equivalent Periodic Rate (r): r = (1 + Annual Rate / 2)^(2 / M) - 1
2. Total Payments (n): n = Amortization Years × M
3. Monthly Payment (PMT): PMT = P * [r * (1 + r)^n] / [(1 + r)^n - 1]
Formula Sources: OSFI Guideline B-20 | FCAC Mortgage Calculations
Variables Used in the Calculation
- P (Loan Principal): The total amount of money borrowed for the mortgage.
- I (Annual Interest Rate): The stated annual interest rate, expressed as a percentage.
- N (Amortization Period): The total length of time, in years, over which the mortgage debt will be repaid.
- M (Payment Frequency): How often payments are made (typically monthly, bi-weekly, or weekly).
- PMT (Periodic Payment): The calculated amount of each scheduled payment.
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What is a Canadian Mortgage Calculator?
A Canadian Mortgage Calculator is an essential financial tool designed specifically for the unique mortgage rules in Canada. Unlike some international calculators, it must use the **semi-annual compounding** method for fixed-rate mortgages as mandated by Canadian federal law, even if the payments are made monthly, bi-weekly, or weekly. This makes the calculation slightly more complex but ensures the estimated payment is accurate for budgeting purposes.
The calculator takes your principal loan amount, the annual interest rate, the amortization period (typically 25 years), and your chosen payment frequency to determine the exact payment amount required to pay off the loan by the end of the term. It also provides a breakdown of the total interest you will pay over the life of the mortgage.
How to Calculate a Canadian Mortgage Payment (Example)
Let’s use an example: Principal $400,000, Rate 5.0%, Amortization 25 years, Monthly Payments (M=12).
- Calculate the Equivalent Periodic Rate (r): The rate is compounded semi-annually (2 times a year). The monthly rate (r) is found using the formula: $r = (1 + 0.05 / 2)^{(2 / 12)} – 1$. This results in $r \approx 0.0041239$.
- Determine Total Number of Payments (n): Total payments $n = 25 \text{ years} \times 12 \text{ payments/year} = 300$.
- Apply the Payment Formula: Plug P, r, and n into the standard amortization formula to find the payment (PMT).
- Result: PMT = $400,000 \times \frac{0.0041239 \times (1 + 0.0041239)^{300}}{(1 + 0.0041239)^{300} – 1} \approx \$2,323.77$.
Frequently Asked Questions (FAQ)
Is the Canadian Mortgage Calculator accurate for all provinces?
Yes. The semi-annual compounding rule is a federal regulation, making the core calculation accurate across all Canadian provinces. However, property taxes and insurance are not included in the payment calculation.
What is the difference between Amortization and Term?
Amortization is the total length of time it takes to pay off the entire loan (e.g., 25 years). The Term is the shorter period (e.g., 5 years) for which your interest rate, payment schedule, and lender are fixed before renewal.
Why does the Canadian calculator use semi-annual compounding?
It is a requirement under the Canadian Interest Act. This means that interest is calculated twice a year, regardless of how frequently you make your payments.
Can I use this calculator for variable-rate mortgages?
While the calculation uses your current rate, variable-rate mortgages typically use a monthly compounding structure. For a variable rate, always confirm the compounding frequency with your lender, but this calculator is optimized for the federally mandated semi-annual compounding used by fixed-rate mortgages.