Canadian mortgage payment calculator: what will my payment be?

How a mortgage payment works in Canada

Your payment covers two things: interest the lender charges and principal that pays down the balance. The figure comes from three inputs — the mortgage amount, the interest rate, and the amortization (the number of years to pay it off in full). The one quirk worth knowing is that fixed-rate Canadian mortgages compound interest semi-annually, not monthly the way American ones do. That makes the effective monthly rate slightly lower than dividing the annual rate by twelve, which is why a payment you work out by hand rarely matches the lender’s number to the dollar. The calculator above uses the proper convention, so what you see is what a lender will quote on the same figures.

Two more terms matter. Amortization is the full payoff period — 25 years is the insured maximum for most buyers; 30 is available to first-time buyers, new-build buyers and many uninsured borrowers. Term is the length of your contract with one lender, usually five years, after which you renew the remaining balance at whatever rates are available then. The payment is set by the amortization; the term just decides when you renegotiate.

What changes your payment

Four levers move the number. A larger down payment shrinks the mortgage and, once you clear 20%, removes default insurance entirely. The interest rate is the biggest swing — on a $560,000 mortgage, every half-point is roughly $150 a month. Amortization trades monthly relief against lifetime cost: stretching from 25 to 30 years lowers the payment but adds years of interest. And payment frequency changes how fast the balance falls — accelerated bi-weekly squeezes in the equivalent of one extra monthly payment a year. If your down payment is under 20%, the CMHC premium is folded into the balance, so a smaller down payment quietly raises the amount you’re paying interest on.

A worked example

Say a couple buys a $700,000 home in Burlington with 20% down. That’s $140,000 down and a $560,000 mortgage: conventional, so no insurance premium. Assume a five-year fixed at 4.39% (an illustrative rate, not a quote; see today’s rates) amortized over 25 years. Their monthly payment works out to about $3,065. In the first year, roughly $24,100 of that goes to interest and about $12,700 pays down principal. Early payments are interest-heavy, which is normal and shifts toward principal over time.

Now switch them to accelerated bi-weekly. Instead of $3,065 a month, they pay half, about $1,533, every two weeks. Because there are 26 two-week periods in a year, that’s 13 monthly payments’ worth instead of 12. That single extra payment a year, all of it principal, knocks roughly three yearsoff the 25-year amortization and saves them tens of thousands in interest over the life of the loan — without the monthly budget ever feeling different. Run your own price and rate above to see your exact figures.

How to lower your payment

If the monthly number is higher than you want, start with the rate — shopping across lenders, or choosing an insured (high-ratio) mortgage when you qualify, often beats the posted rate at your own bank. A bigger down paymentdirectly cuts the amount financed and can remove the insurance premium. Stretching the amortization to 30 years is the fastest way to drop the monthly figure, but understand the trade: lower payments now, more interest paid over the full term. Going the other direction, accelerated payments and lump-sum prepayments won’t lower the scheduled payment but will clear the balance years sooner. Most lenders allow annual prepayments of 10–20% of the original balance without penalty — worth confirming before you sign.

Related scenarios

The payment is only part of the picture. To find out what price you can actually qualify for, work through the affordability calculator, which adds property tax, heat and condo fees and applies the lender ratios. If your down payment is under 20%, estimate the insurance cost with the CMHC insurance calculator before it gets added to the balance above. And if you’re thinking about breaking your term early to chase a lower rate, check the cost first with the prepayment penalty calculator.