About this calculator
Canadian mortgages are not calculated the American way. A quoted Canadian rate is a nominal rate compounded semi-annually, so the true monthly rate is (1 + rate/2)^(2/12) − 1 — at 4.5%, a $640,000 mortgage over 25 years costs $3,542.23 a month, slightly less than the $3,557.33 a US formula gives on the same numbers. This calculator uses the Canadian conversion, adds the CMHC insurance premium automatically when your down payment is under 20%, and shows the higher payment you must qualify at under the federal stress test (the greater of your rate + 2%, or 5.25%).
The closing tax depends entirely on your province. Ontario charges land transfer tax in bands up to 2.5%, and Toronto charges it again. British Columbia's property transfer tax reaches 3% plus a further 2% on the slice above $3 million. Quebec levies transfer duties ("welcome tax") on its own indexed bands, with Montreal setting higher upper rates. Alberta charges no transfer tax at all — just registration fees of about 0.1%. Pick your province above, or go deeper on the province pages for Ontario, BC, Alberta and Quebec.
How to use it
- Enter the home price and down payment — if the down payment is under 20%, the CMHC premium is calculated and added to the mortgage automatically.
- Add the mortgage rate and amortization (25 years is standard; 30 is available to first-time buyers and new builds).
- Enter your estimated annual municipal property tax — it is shown monthly as part of the total payment.
- Tick "first-time home buyer" if it applies: provincial transfer-tax reliefs are then applied.
- Read the total monthly payment, the transfer tax due at closing, and the stress-test payment your lender must qualify you at.
The formula
Canadian mortgage rates are quoted as nominal rates compounded semi-annually ("j2"), not monthly like US rates. Converting the quoted rate to its true monthly equivalent is why a Canadian payment at 4.5% is slightly lower than the same rate run through a US calculator. The CMHC premium, when the down payment is under 20%, is added to the loan before the payment is calculated.
Worked example
An $800,000 home with $160,000 down (20%) leaves a $640,000 mortgage with no CMHC premium. At 4.50% over a 25-year amortization the principal and interest payment is $3,542.23 a month; add $7,200 a year of property tax ($600 a month) for a total of $4,142.23. Your lender must also qualify you at 6.50% (rate + 2%), where the payment would be $4,286.87. The land transfer tax on that $800,000 purchase is $12,475 in Ontario, $14,000 in BC, $10,111 in Quebec — and just $1,540 of registration fees in Alberta.
Frequently asked questions
Why is the Canadian payment lower than a US calculator shows?
Because Canadian rates compound semi-annually while US rates compound monthly. Converting a 4.5% Canadian rate to a monthly rate gives 0.37154% a month, against 0.375% for the same headline rate in the US. On a $640,000, 25-year mortgage that difference is worth about $15 a month — and it is why you should never plan a Canadian purchase with an American calculator.
How does the CMHC premium work?
If your down payment is under 20% and the home costs $1.5 million or less, mortgage default insurance is mandatory. The premium is a percentage of the loan set by your loan-to-value: 2.80% at 80–85% LTV, 3.10% at 85–90% and 4.00% at 90–95% (add 0.20 points for a 30-year amortization). The premium is added to your mortgage, but the provincial sales tax on it — 8% in Ontario, 9% in Quebec — must be paid in cash at closing. Homes over $1.5 million need at least 20% down and cannot be insured.
What is the mortgage stress test?
Under OSFI's B-20 rules (and the matching federal rule for insured loans), you must qualify as if your rate were the greater of your contract rate + 2 percentage points or 5.25%. At a 4.5% contract rate you qualify at 6.50%, which on a $640,000 mortgage means proving you could carry a $4,286.87 monthly payment even though you will actually pay $3,542.23. The calculator shows both figures.
What is the minimum down payment in Canada?
For homes up to $500,000: 5%. Between $500,000 and $1.5 million: 5% of the first $500,000 plus 10% of the rest — so $35,000 on a $600,000 home and $75,000 on a $1 million home. Above $1.5 million: 20%. The calculator enforces the minimum and tells you the figure if you enter less.
What formula does this mortgage calculator — canada calculator use?
Monthly rate j2 = (1 + annual rate ÷ 2)^(2/12) − 1; payment = loan × j2 ÷ (1 − (1 + j2)^−n) Canadian mortgage rates are quoted as nominal rates compounded semi-annually ("j2"), not monthly like US rates. Converting the quoted rate to its true monthly equivalent is why a Canadian payment at 4.5% is slightly lower than the same rate run through a US calculator. The CMHC premium, when the down payment is under 20%, is added to the loan before the payment is calculated. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.