Canadian Mortgage Calculator

How to use this calculator

1. Enter or choose purchase price.
2. Enter or choose down payment.
3. Enter or choose interest rate (per year).
4. Enter or choose amortization period.
5. Enter or choose payment frequency.
6. The payment per period updates as you type. Use Copy result or Share to keep it.

Method

Effective annual rate = (1 + j ÷ 2)² − 1; rate per payment i = (1 + EAR)^(1 ÷ p) − 1; Payment = L × i × (1 + i)ⁿ ÷ ((1 + i)ⁿ − 1). Accelerated bi-weekly = monthly payment ÷ 2 (weekly ÷ 4).

j

quoted annual rate

p

payments per year (12, 24, 26 or 52)

n

amortization years × p

L

price − down payment + any insurance premium

Worked example

1. Mortgage = 600,000 × 80% = $480,000.
2. Effective annual rate = 1.025² − 1 = 5.0625%; monthly rate = 1.050625^(1/12) − 1 = 0.412392%.
3. Payment = 480,000 × 0.00412392 × 1.00412392³⁰⁰ ÷ (1.00412392³⁰⁰ − 1) = $2,791.70.

A $480,000 mortgage at 5% compounded semi-annually costs $2,791.70 a month over 25 years.

What the result means

Accelerated bi-weekly or weekly payments add the equivalent of one extra monthly payment a year, which cuts years off the amortization. Plain bi-weekly payments cost about the same as monthly over a year.

Assumptions and limits

• The rate stays the same for the whole amortization (Canadian terms are usually renewed every 1–5 years at the rate then on offer).
• Fixed-rate mortgages use semi-annual compounding, as is standard under the Interest Act; choose monthly if your lender compounds monthly.
• Maximum amortization periods, insurance eligibility and premium rates are set by insurers and federal rules; enter your lender’s figures.
• Provincial sales tax on insurance premiums and land transfer tax are not included.

Sources

• Interest Act (R.S.C., 1985, c. I-15), section 6