Why does this calculator differ from a US mortgage calculator?

Canadian federal law requires fixed-rate mortgages to be compounded semi-annually at most, while US mortgages compound monthly. A quoted 5% rate in Canada is first converted to a semi-annual rate (2.5%), then to an equivalent monthly rate, which produces a slightly different payment than simply dividing the nominal rate by 12.

How is the effective monthly rate calculated?

The nominal annual rate is halved to get the semi-annual rate, then converted to a monthly rate with the formula (1 + semi-annual rate)^(1/6) - 1. This monthly rate is what actually gets applied to the outstanding balance each month.

Does this apply to variable-rate mortgages too?

Semi-annual compounding is the standard for fixed-rate mortgages in Canada. Variable-rate mortgages are typically compounded monthly, so the payment on a variable-rate loan at the same nominal rate would be calculated differently.

What amortization period should I use?

25 years is the most common amortization period for a Canadian mortgage with less than 20% down, since insured mortgages are capped at 25 years. Uninsured mortgages (20% or more down) can extend to 30 years, which lowers the monthly payment but increases total interest paid.

Does the result include property tax, insurance, or CMHC premiums?

No. This calculator computes the principal-and-interest payment only. Property tax, home insurance, and CMHC mortgage default insurance premiums (required when the down payment is below 20%) are added separately by your lender.

Canada Mortgage Calculator

Name: Canada Mortgage Calculator
Availability: InStock
Author: Nham Vu

Enter the home price, down payment, interest rate, and amortization period to get your monthly mortgage payment using Canada's semi-annual compounding rule.

Mortgage Details

Home Price

Down Payment

Interest Rate (annual, nominal)

Compounded semi-annually, per Canadian mortgage convention.

Amortization Period

Enter a home price to see your mortgage breakdown.

Monthly Payment

C$0.00

principal & interest only

Loan Amount

C$0.00

Total Interest

C$0.00

Total Repaid

C$0.00

Rate detail	Value
Nominal annual rate	—
Effective annual rate	—
Effective monthly rate	—
Number of payments	—

Summary

Enter the home price, down payment, interest rate, and amortization period to get your monthly mortgage payment using Canada's semi-annual compounding rule.

How it works

Enter the home purchase price.
Enter your down payment as a dollar amount or percentage.
Enter the mortgage interest rate (the nominal annual rate quoted by your lender).
Choose the amortization period in years.
Read the monthly payment, total interest, and total amount repaid in the results panel.

Use cases

Estimating monthly payments before making an offer on a home in Canada.
Comparing lender rate quotes using the correct semi-annual compounding math.
Checking how a longer or shorter amortization period changes total interest paid.
Seeing how a larger down payment reduces the loan principal and monthly payment.
Understanding why a Canadian mortgage payment differs from a US mortgage at the same quoted rate.

Frequently Asked Questions

Last updated: 2026-07-21 · Reviewed by Nham Vu