Canadian Mortgage Calculator
Calculate a Canadian mortgage payment — Canadian fixed rates compound semi-annually by law, unlike the US convention.
- Principal$400,000.00 · 55%
- Total Interest$332,469.78 · 45%
For every dollar borrowed, you pay back $1.83 — interest adds 83% on top.
- Effective Annual Rate5.58%
Canadian law requires fixed mortgage rates to compound semi-annually — this gives a slightly different monthly rate than the US convention of monthly compounding.
About the Canadian Mortgage Calculator
Plug a Canadian mortgage rate into a US-style calculator and you'll get a payment that's subtly wrong, because Canadian law requires fixed mortgage rates to compound semi-annually, not monthly the way US mortgages conventionally do — the same quoted rate produces a slightly different effective monthly rate depending on which convention is used. This calculator applies the Canadian semi-annual compounding rule correctly, so the payment it shows matches what a Canadian lender would actually quote.
It's built for homebuyers and homeowners in Canada working out a mortgage payment, or comparing a lender's quoted rate against their own estimate, where getting the compounding convention right actually changes the number.
Your mortgage amount, the rate you're comparing, the amortization you're testing — none of it needs to go through a bank's own calculator or trigger a follow-up call from a mortgage specialist. This runs entirely on your device.
How it’s calculated
Canadian fixed mortgage rates are, by law, compounded semi-annually rather than monthly. This calculator first converts the nominal annual rate to an effective annual rate using semi-annual compounding, then converts that effective annual rate into the equivalent monthly rate used in the standard amortization formula — a small but legally mandated difference from how a US mortgage calculator would handle the same nominal rate.
Frequently asked questions
Why is my Canadian mortgage rate compounded semi-annually instead of monthly?
It's a legal requirement under Canadian law for fixed-rate mortgages, not a lender's choice — this produces a slightly lower effective rate than monthly compounding would at the same nominal rate, which is why using a US-style calculator on a Canadian mortgage gives a slightly inaccurate payment.
What's the difference between amortization period and mortgage term in Canada?
The amortization period (often 25 years) is the total time to pay off the loan; the term (often 5 years) is how long your current rate and conditions are locked in before you renew, typically with a new lender negotiation or rate. You can renew multiple times over one amortization period.
Do I need mortgage default insurance (CMHC) in Canada?
It's mandatory on most mortgages with a down payment under 20% of the home's purchase price, added as a premium that's typically rolled into the mortgage principal — similar in purpose to US PMI, but administered federally rather than through private insurers.
Is a fixed or variable rate mortgage better in Canada?
It depends on your risk tolerance and the rate environment — fixed rates offer payment certainty for the term, while variable rates can be cheaper over time historically but expose you to payment changes if the lender's prime rate moves. There's no universally correct choice; it comes down to your own comfort with payment uncertainty.
How much does semi-annual compounding actually cost me compared to monthly?
The difference is small per payment — typically a few dollars a month on an average mortgage — but it's a real, legally required difference, and this calculator's effective annual rate figure shows you the exact gap for your specific numbers.
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