Answer first
What this calculator tells you
Calculate a Canadian mortgage payment with half-yearly compounding from the price, down payment, rate and amortization. Compare a quote with the payment a Canadian lender's half-yearly compounding produces, not the US monthly method. Formula: Monthly rate = (1 + annual rate ÷ 2)^(1/6) − 1, because Canadian fixed-rate mortgages compound half-yearly; payment = P × r ÷ (1 − (1 + r)⁻ⁿ). At the worked-example inputs, the monthly payment is $2,326. Holding every other input steady, moving annual interest rate from 3.0% to 7.0% moves the result from $1,893 to $2,802.
Transparent method
The formula
Compare a quote with the payment a Canadian lender's half-yearly compounding produces, not the US monthly method.
Worked example
Example inputs
How to interpret the result
Canadian fixed-rate mortgages are quoted with half-yearly compounding, while payments run monthly, so the monthly rate is not the annual rate divided by twelve. A 5 percent quote works out to a monthly rate of about 0.412 percent and an effective annual rate of about 5.06 percent. On a $400,000 mortgage over 25 years that gives a payment near $2,326, a little lower than the same rate figured the American way.
At the worked-example inputs the monthly payment is $2,326. It rises with home price and annual interest rate and falls as amortization period and down payment increase.
This uses the half-yearly compounding that Canadian fixed-rate mortgages commonly carry, over the full amortization, and leaves out mortgage default insurance, closing costs, taxes and any renewal at a different rate at the end of the term. Your lender's disclosure statement is the binding figure.
Before you rely on it
What to check
Ask which compounding your contract uses. Variable-rate mortgages often compound monthly, and a quote's rate type decides which formula applies.
The common error
Where people go wrong with canadian mortgage calculator
Running a Canadian quote through a US calculator. The difference looks small each month, but across the amortization it changes total interest by a real amount.
Sensitivity evidence
How annual interest rate changes the monthly payment
Holding every other input at the worked-example value, moving annual interest rate from 3.0% to 7.0% moves the monthly payment from $1,893 to $2,802: a spread of $909, or 39% of the worked-example result.
| Annual interest rate | Monthly payment | Total interest over the amortization | Effective annual rate |
|---|---|---|---|
| 3.0% | $1,893 | $167,895 | 3.0% |
| 4.0% | $2,104 | $231,224 | 4.0% |
| 5.0%worked example | $2,326 | $297,926 | 5.1% |
| 6.0% | $2,559 | $367,768 | 6.1% |
| 7.0% | $2,802 | $440,499 | 7.1% |
Every input, tested
Which input moves the monthly payment most
Of the 4 inputs, amortization period moves the monthly payment most ($605 across the range tested) and down payment moves it least ($116).
| Input | Tested from | To | Monthly payment at each end | Swing |
|---|---|---|---|---|
| Amortization period | 19.0 years | 31.0 years | $2,710 to $2,105 | $605 (26%) |
| Home price | $450,000 | $550,000 | $2,036 to $2,617 | $582 (25%) |
| Annual interest rate | 4.0% | 6.0% | $2,104 to $2,559 | $455 (20%) |
| Down payment | $90,000 | $110,000 | $2,385 to $2,268 | $116 (5.0%) |
Two variables at once
Monthly payment by annual interest rate and home price
Across the grid the monthly payment runs from $1,420 to $3,502. Moving annual interest rate from 3.0% to 7.0% shifts it by $909 at the middle column, and moving home price from $400,000 to $600,000 shifts it by $1,163 at the middle row, so home price is the bigger lever here.
| Annual interest rate \ Home price | $400,000 | $500,000 | $600,000 |
|---|---|---|---|
| 3.0% | $1,420 | $1,893 | $2,366 |
| 4.0% | $1,578 | $2,104 | $2,630 |
| 5.0% | $1,745 | $2,326 | $2,908 |
| 6.0% | $1,919 | $2,559 | $3,199 |
| 7.0% | $2,101 | $2,802 | $3,502 |
The highlighted cell is the worked example: $2,326.
Step by step
The worked example, input by input
| Input | Value used | What it means |
|---|---|---|
| Home price | $500,000 | Enter the home price used in this calculation. |
| Down payment | $100,000 | Enter the down payment used in this calculation. |
| Annual interest rate | 5.0% | The rate on your mortgage contract, quoted with half-yearly compounding. |
| Amortization period | 25.0 years | Enter the amortization period used in this calculation. |
| Monthly payment | $2,326 | |
| Total interest over the amortization | $297,926 | |
| Effective annual rate | 5.1% | |
Inputs, definitions and assumptions
Home price
Enter the home price used in this calculation. The prefilled worked-example value is $500,000.
Down payment
Enter the down payment used in this calculation. The prefilled worked-example value is $100,000.
Annual interest rate
The rate on your mortgage contract, quoted with half-yearly compounding. The prefilled worked-example value is 5.0%.
Amortization period
Enter the amortization period used in this calculation. The prefilled worked-example value is 25.0 years.
How to use this calculator
- 1Verify the inputs. Gather home price, down payment, annual interest rate and amortization period from your own documents; the prefilled values are examples.
- 2Save a baseline. The worked example puts the monthly payment at $2,326. Store your own version of it as Scenario A.
- 3Test one change. Start with amortization period, the input with the biggest effect here: moving amortization period from 19.0 years to 31.0 years takes the monthly payment from $2,710 to $2,105, a swing of 26% of the worked-example figure.
- 4Check the extremes. At half the example amortization period (12.5 years) the monthly payment is $3,581; at double (50.0 years) it is $1,802.
People also ask
Frequently asked questions
How do you calculate canadian mortgage?
Monthly rate = (1 + annual rate ÷ 2)^(1/6) − 1, because Canadian fixed-rate mortgages compound half-yearly; payment = P × r ÷ (1 − (1 + r)⁻ⁿ). Enter home price in dollars, down payment in dollars, annual interest rate in percent and amortization period in years (5 means 5%). At the worked-example inputs the monthly payment is $2,326.
What does the canadian mortgage result mean?
Compare a quote with the payment a Canadian lender's half-yearly compounding produces, not the US monthly method. At the worked-example inputs the monthly payment is $2,326. It rises with home price and annual interest rate and falls as amortization period and down payment increase.
How much does annual interest rate change the monthly payment?
Holding every other input at the worked-example value, moving annual interest rate from 3.0% to 7.0% moves the monthly payment from $1,893 to $2,802, a spread of $909.
What are the limits of this canadian mortgage calculator?
This uses the half-yearly compounding that Canadian fixed-rate mortgages commonly carry, over the full amortization, and leaves out mortgage default insurance, closing costs, taxes and any renewal at a different rate at the end of the term. Your lender's disclosure statement is the binding figure. The tables on this page test annual interest rate only from 3.0% to 7.0%; a value outside that range is not tabulated here.
Which input moves the monthly payment most in the canadian mortgage calculator?
Ranked by how far each moves the monthly payment across the range tested: amortization period ($605, 26%), home price ($582, 25%), annual interest rate ($455, 20%) and down payment ($116, 5.0%).
If I double amortization period in the canadian mortgage calculator, does the monthly payment double?
Doubling it from 25.0 years to 50.0 years takes the monthly payment from $2,326 to $1,802, which is 0.77 times the worked-example figure. So it falls instead of rising. Halving it to 12.5 years gives $3,581.
How much does home price matter in the canadian mortgage calculator?
The worked example uses $500,000. Holding every other input at its worked-example value, moving home price from $450,000 to $550,000 takes the monthly payment from $2,036 to $2,617, a swing of 25% of the worked-example figure.
How much does down payment matter in the canadian mortgage calculator?
The worked example uses $100,000. With the other inputs left at the worked example, moving down payment from $90,000 to $110,000 takes the monthly payment from $2,385 to $2,268, a swing of 5.0% of the worked-example figure.
How much does amortization period matter in the canadian mortgage calculator?
The worked example uses 25.0 years. With the other inputs left at the worked example, moving amortization period from 19.0 years to 31.0 years takes the monthly payment from $2,710 to $2,105, a swing of 26% of the worked-example figure.
Which inputs change the total interest over the amortization in the canadian mortgage calculator?
At the worked-example inputs it is $297,926. Home price takes it from $260,685 to $335,167, down payment takes it from $305,374 to $290,478, annual interest rate takes it from $231,224 to $367,768 and amortization period takes it from $217,861 to $383,034.
Which inputs change the effective annual rate in the canadian mortgage calculator?
At the worked-example inputs it is 5.1%. Annual interest rate takes it from 4.0% to 6.1%.
Sources and evidence
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