Mortgage Calculator Canada
Semi-annual compounding (Interest Act), CMHC insurance, OSFI stress test, amortization schedule.
Inputs
OSFI B-20: qualifying rate = max(contract + 2%, 5.25%)
Amortization Schedule
Renewal in 5 years
The math behind your result
Every number on this page is derived from the exact Canadian regulatory formula — not approximations or estimates. The calculation runs entirely in your browser using the inputs you provided. Expand the section below to verify the math step-by-step, or share the URL to reproduce these exact results.
▶ How is this calculated?
1. Semi-annual compounding (Canadian Interest Act)
Canadian fixed mortgages are compounded semi-annually, not monthly. This is mandated by the
Interest Act (R.S.C. 1985, c.I-15, s.6). US calculators that use r/12 are wrong for Canada.
Effective monthly rate: r = (1 + annualRate / 2)^(2/12) - 1 Example at 6.09%: r = (1 + 0.0609/2)^(1/6) - 1 = 0.005012 (0.5012%/month) US r/12 = 0.005075 — different, and wrong for Canada
2. Payment formula (PMT)
P = L × r × (1+r)^N / ((1+r)^N - 1) where: L = mortgage principal r = effective period rate (from step 1) N = amortization years × payments per year
3. CMHC insurance premium
Down payment % | Premium rate (on loan amount) -----------------|-------------------------------- 5.00 – 9.99% | 4.00% 10.00 – 14.99% | 3.10% 15.00 – 19.99% | 2.80% ≥ 20.00% | 0% (conventional, no insurance) Max insurable: $1,500,000 (raised Dec 2024) Source: CMHC, Homeowner Mortgage Loan Insurance, 2024
4. Stress test (OSFI B-20)
Qualifying rate = max(contractRate + 2%, 5.25%) GDS = (monthly mortgage + tax + heat + 50% condo) / (grossIncome / 12) TDS = (GDS numerator + other monthly debts) / (grossIncome / 12) Pass: GDS ≤ 39% AND TDS ≤ 44% Source: OSFI Guideline B-20, amended Jan 2018, last updated 2023
About the Canadian Mortgage Calculator
Why Canadian mortgages are different from US mortgages
The most important difference: Canadian fixed-rate mortgages are compounded semi-annually, not monthly.
This is mandated by the Interest Act (R.S.C. 1985, c.I-15, sections 6 and 10), which requires
that mortgage rates be stated on a semi-annual not-in-advance basis. Every US calculator — and many
Canadian ones that are secretly US reskins — use monthly compounding (r/12), producing
a slightly higher payment that overstates the true Canadian cost. The difference on a $600,000 mortgage
at 6.09% is about $28/month, or roughly $8,300 over 25 years. Not trivial.
How CMHC mortgage insurance works
If your down payment is less than 20% of the home's purchase price, federal law (the Protection of Residential Mortgage or Hypothecary Insurance Act) requires your mortgage to carry default insurance through CMHC, Sagen, or Canada Guaranty. CMHC is the most common. The premium is added directly to your mortgage principal — it's not paid at closing in most provinces (Quebec, Ontario, Saskatchewan, and Manitoba charge PST on the premium in cash at closing; the premium itself is still financed).
As of December 2024, CMHC raised the maximum insurable purchase price from $1,000,000 to $1,500,000, allowing buyers in Canada's most expensive cities to access insured mortgages with less than 20% down on higher-priced homes for the first time.
The OSFI stress test
Since January 2018 (updated 2023), all federally regulated lenders (major banks, credit unions federally regulated, trust companies) are required by the Office of the Superintendent of Financial Institutions (OSFI) to qualify borrowers at the greater of: their contract rate plus 2%, or 5.25% — whichever is higher. As of 2025 at rates near 5.5%, the qualifying rate is typically 7.5%.
The GDS (Gross Debt Service) ratio must stay at or below 39%, and the TDS (Total Debt Service) ratio at or below 44%. GDS includes your mortgage payment, property tax, heating, and 50% of condo fees. TDS adds all other monthly debt obligations (car loans, student loans, credit cards, etc.) on top.
Term vs amortization — a uniquely Canadian distinction
In the US, a "30-year mortgage" usually means a fixed rate for 30 years. In Canada, most mortgages have a 5-year term within a 25-year amortization period. Your rate is only locked in for the term; at term-end you must renew at whatever rate is available. This is why "renewal shock" — when your renewal rate is higher than your original rate — was a major concern in 2023–2026, when roughly 2.2 million Canadian households renewed mortgages taken out in the ultra-low-rate 2020–2021 period.
Why US calculators get Canadian mortgages wrong
When you search "mortgage calculator" on Google, most page-1 results are US-built tools that: (1) use monthly compounding instead of semi-annual, (2) include mortgage interest deductibility (which doesn't exist in Canada for principal residences), (3) don't have CMHC (they have PMI, which is a monthly payment, not a lump-sum premium added to the mortgage), and (4) don't know about the OSFI stress test. The calculation on this page uses the correct Canadian formulas throughout.
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- Canadian Income Tax Calculator — Estimate your take-home to see what you can actually afford.
Frequently asked questions
Why does Canada use semi-annual compounding for mortgages?
The Interest Act (Canada) requires federally regulated lenders to use semi-annual compounding for fixed-rate mortgages — not monthly as in the US. An advertised 5% rate becomes an effective annual rate of approximately 5.0625%. Our calculator applies the correct conversion: monthly rate = (1 + annual_rate/2)^(1/6) − 1.
What is the OSFI B-20 mortgage stress test in Canada?
The OSFI B-20 guideline requires federally regulated lenders to qualify borrowers at the higher of your contract rate plus 2%, or the Bank of Canada 5-year benchmark rate (currently 5.25%). If you apply for a 5% mortgage, you must qualify at 7%. This calculator shows your stress-test qualifying amount alongside your actual payment.
When is CMHC mortgage insurance required in Canada?
CMHC (or Sagen/Canada Guaranty) mortgage default insurance is mandatory when your down payment is under 20%. The premium ranges from 2.8% to 4% of the mortgage amount, added to your balance. Homes over $1.5M are not eligible for insured mortgages. Minimum down payment: 5% for homes up to $500,000; 10% for the $500K–$999,999 portion; 20% for any purchase above $1M.
What is the difference between amortization period and mortgage term in Canada?
Amortization is the total repayment period (typically 25 years; up to 30 for insured mortgages after December 2024). Term is the locked-in rate period (usually 1–5 years), after which you renew. A 30-year vs 25-year amortization on a $500,000 mortgage can add $100,000+ in total interest even if the rate is identical.
How do I calculate the true all-in cost of buying a home in Canada?
True cost = purchase price + total mortgage interest + CMHC premium (if < 20% down) + land transfer tax + legal fees (~$1,500–$3,000) + home inspection ($400–$600) + title insurance (~$300). The interest alone over 25 years often equals or exceeds the original purchase price. See our Land Transfer Tax Calculator and the amortization schedule for a complete closing-day breakdown.