🏠 Mortgage Calculator Canada 2026 — Monthly Payments & Total Interest
This free Canadian mortgage calculator shows your exact monthly payment, total interest over the full amortisation, and lets you compare different scenarios side by side. With Canadian home prices remaining elevated across Ontario in 2026, understanding the true cost of any mortgage before you sign is essential — the difference between a 25-year and 30-year amortisation on a $650,000 mortgage is over $80,000 in extra interest.
Canadian mortgages compound semi-annually by law — not monthly like US mortgages. This calculator uses the correct Canadian compounding formula, so your payment figures are accurate for any Canadian lender quote. Enter your numbers and get an honest picture of what your mortgage will really cost.
Canadian Mortgages — Everything You Need to Know in 2026
4.5–6%
5-yr Fixed Rate 2026
25–30yr
Standard Amortisation
How Canadian Mortgages Compound Differently
Canadian law (Interest Act, Section 6) requires that mortgage interest compound semi-annually — not monthly like US mortgages. This means the effective monthly rate is calculated as: (1 + annual rate/2)^(1/6) − 1. At 5.5% annual rate, this produces a monthly rate of approximately 0.4532% — slightly less than simply dividing by 12 (0.4583%). The difference is small but real; this calculator uses the correct Canadian formula.
CMHC Mortgage Insurance — What It Costs and When It Applies
Any mortgage with less than 20% down payment in Canada requires CMHC (Canada Mortgage and Housing Corporation) mortgage insurance. The premium is 2.8% of the mortgage amount for 15%–19.99% down, 3.1% for 10%–14.99%, and 4.0% for 5%–9.99%. The premium is added to your mortgage and amortised over the full term — costing you interest on top of the premium itself. On a $600,000 purchase with 5% down: CMHC premium of $22,800 is added to the $570,000 mortgage, making the actual loan $592,800.
Fixed vs Variable Rate Mortgages in Canada
Fixed-rate mortgages lock your rate for the term (typically 1–5 years) providing payment certainty. Variable-rate mortgages float with the Bank of Canada prime rate — historically cheaper on average but with payment volatility. The 2022–2024 rate cycle — where the Bank of Canada hiked from 0.25% to 5.0% in 18 months — demonstrated the real risk of variable mortgages for households with tight budgets. In 2026 with rates moderating, variable rates are once again attracting attention from buyers expecting further rate cuts.
First-Time Home Buyer Incentives in Canada
- First Home Savings Account (FHSA): Up to $40,000 tax-deductible contributions, tax-free qualifying withdrawal for first home purchase
- RRSP Home Buyers Plan: Withdraw up to $35,000 per person ($70,000 per couple) tax-free — must repay over 15 years
- Ontario Land Transfer Tax Rebate: Up to $4,000 rebate on provincial LTT for first-time buyers
- Toronto Additional LTT Rebate: Additional up to $4,475 for Toronto first-time buyers
- First-Time Home Buyer Tax Credit: $10,000 federal non-refundable credit = approximately $1,500 in tax savings
💡 30-year amortisation for insured mortgages (August 2024): First-time buyers purchasing new builds can now qualify for insured mortgages with 30-year amortisation (up from 25). This reduces the monthly payment but significantly increases total interest — use this calculator to compare the 25 vs 30 year scenarios for your specific numbers before choosing the longer period.
❓ Frequently Asked Questions — Mortgage Calculator
How is a Canadian mortgage payment calculated?
Canadian mortgage payments use semi-annual compounding by law (Interest Act, Section 6). The effective monthly rate is calculated as (1 + annual rate/2)^(1/6) − 1, then applied to the standard amortisation formula: Payment = Principal × [r(1+r)^n] / [(1+r)^n − 1] where r is the effective monthly rate and n is total monthly payments. This produces a slightly different result than US mortgage calculators that compound monthly — this calculator uses the correct Canadian formula.
What is the minimum down payment in Canada?
For homes under $500,000: 5% minimum. For homes $500,000–$999,999: 5% on the first $500,000 plus 10% on the remainder. For homes $1,000,000+: 20% minimum (CMHC insurance not available above this threshold). Down payments below 20% require CMHC mortgage insurance of 2.8%–4% of the mortgage amount added to your loan. The 20% threshold to avoid CMHC insurance saves $16,000–$24,000 on a $600,000 mortgage in premium costs alone.
What mortgage rate should I expect in Canada in 2026?
Following the Bank of Canada's rate-cutting cycle beginning in 2024, 5-year fixed rates are approximately 4.5%–5.5% and variable rates approximately 4.5%–5.0% depending on lender and credit profile. Mortgage brokers routinely access rates 0.3%–0.7% below bank-posted rates. Getting at least 3 quotes — your bank, a mortgage broker, a credit union — before committing is the most effective way to minimise your rate.
What is the difference between a 25-year and 30-year amortisation?
A 30-year amortisation reduces monthly payment by approximately 10%–12% versus 25 years but increases total interest by 20%–25%. On a $600,000 mortgage at 5.5%: 25 years = $3,531/month and approximately $459,000 total interest. 30 years = $3,276/month but approximately $579,000 total interest — $120,000 more. Accelerated bi-weekly payments on the 25-year term are typically the better financial choice if you can manage the payment.
How does mortgage renewal work in Canada?
Canadian mortgages renew at end of each term (1–5 years). At renewal, you renegotiate the rate — you are not locked into your original rate for the full amortisation. Your lender sends a renewal offer 120 days before maturity. You are free to switch lenders at renewal with no penalty. Always shop the renewal: mortgage brokers consistently find renewal rates 0.3%–0.6% below what banks offer existing customers on auto-renewal. Even 0.3% on a $500,000 balance saves $1,500/year.
What are prepayment privileges on a Canadian mortgage?
Most Canadian closed mortgages allow: annual lump-sum payments of 10%–20% of the original mortgage amount; increasing regular payment by 10%–20%. Making maximum lump-sum prepayments early in the mortgage term dramatically reduces total interest. Even one extra payment per year of $5,000 on a $600,000 mortgage can save $40,000+ in interest and shorten amortisation by 3+ years.
Should I use a mortgage broker or go directly to my bank?
Mortgage brokers almost always deliver better results. A licensed broker shops 40+ lenders simultaneously at no cost to you (paid by the lender), has access to rates unavailable to walk-in bank customers, and is legally required to act in your best interest. Typical rate savings through a broker is 0.3%–0.8% — on a $600,000 mortgage, even 0.5% lower saves approximately $25,000 in total interest.
What is CMHC mortgage insurance and how much does it cost?
CMHC mortgage insurance is required for down payments below 20%. Premiums: 4.0% of loan for 5%–9.99% down; 3.1% for 10%–14.99%; 2.8% for 15%–19.99%. The premium is added to your mortgage balance and amortised over the full term. On a $600,000 purchase with 5% down: CMHC premium of $22,800 is added to the $570,000 mortgage, making the actual financed amount $592,800. This also means you pay interest on the premium throughout the amortisation.
What happens if I break my mortgage early in Canada?
Breaking a closed mortgage before the term ends triggers a prepayment penalty — typically the greater of 3 months' interest OR the Interest Rate Differential (IRD). IRD penalties at major banks can be enormous — $20,000–$50,000 on a large mortgage broken 2–3 years early during falling rate periods. Variable-rate mortgages typically only charge 3 months' interest, making them less expensive to break. Always get the exact penalty calculation from your lender in writing before deciding to break.
What closing costs do I need to budget for in Ontario beyond the mortgage?
Beyond the down payment, Ontario homebuyers need: Ontario Land Transfer Tax (approximately 1.5%–2% on a $700K home = ~$9,475); Toronto Municipal LTT if buying in Toronto (approximately doubles the LTT); legal fees and title insurance ($1,500–$2,500); home inspection ($400–$600); title insurance ($200–$400); mortgage default insurance if applicable; moving costs ($800–$3,000). Total closing costs excluding down payment typically run 1.5%–4% of purchase price. First-time buyers qualify for Ontario LTT rebate of up to $4,000, and Toronto first-time buyers for an additional $4,475.